FTC Slams Pop-Up Spammer

By Dennis Callaghan  |  Posted 2003-11-06

FTC Slams Pop-Up Spammer

The Federal Trade Commission Thursday took action against a company that it alleges was exploiting a security hole in Microsofts Messenger Service utility to send full-screen pop-up ads to consumers advertising software that would block the very same pop-up ads.

At the FTCs request, the U.S. District Court for the Northern District of Maryland issued a temporary restraining order against D Squared Solutions LLC, and its officers, Anish Dhingra and Jeffrey Davis, blocking them from continuing their business practices. The FTC plans to seek further legal action against the defendants, including recovering any revenue the company earned from selling its software.

The FTC complaint alleges that the defendants caused Messenger Service windows to pop up on consumers computer screens as often as every 10 minutes, advertising software that would block future pop-up spam messages.

According to the FTC, the defendants placed their pop-up ads near the center of users computer screens, blocking the users work. The ads appeared as long as the users were connected to the Internet, leading to particular trouble for users with always-on broadband connections. The FTC alleges that these users continued to be bombarded by the pop-ups, even when they working in other applications such as word-processing or spreadsheet programs.

The complaint states that the defendants allegedly either sold or licensed their pop-up-sending software to other people, allowing them to engage in the same conduct. The defendants Web site allegedly offered software that would allow buyers to send pop-ups to 135,000 Internet addresses per hour, along with a database of more than two billion unique addresses.

The defendants advertised their product at a number of sites including broadcastblocker.com, defeatpopupspam.com, directadstopper.com and easypopupblocker.com. D Squared Solutions, of San Diego, has long been vilified for its practices at anti-spam Web sites. The company, usually doing business under the brand name BroadcastMarketer, had been in a running battle with America Online Inc., which was trying to block D Squareds pop-up ads from its Internet service.

Next page: FTC calls the practice "extortion."

Page Two

D Squared Solutions has allegedly licensed the software to another San Diego company, Scintillant Inc., which sells the software from the byebyeads.com and endads.com sites. The FTC is considering action against that company as well, though those sites remain up.

"Its an unfair practice to [send] advertisements that create a problem and then charge consumers for the solution," said Howard Beales, director of the FTCs Bureau of Consumer Protection. "We call that extortion, and its not any different in the high-tech world."

Beales recommended that consumers turn off Messenger Service, which he noted "serves no function" for most home users. He also suggested home users install firewall software to protect from pop-up ad intrusions.

Most enterprises are protected from the security hole by firewall software. Microsoft has issued a patch for the hole and has changed default settings of Windows so that Messenger Service is turned off. Messenger Service has been included in Windows since Windows 2000. It was originally developed to allow network administrators to send pop-up alerts to users, such as when printing jobs are done before being exploited by pop-up ad spammers.

Beales said the FTC will seek restitution on behalf of consumers from D Squared Solutions. "We dont know how much they got, but well find out in the course of the litigation," he said. He said he expected the figure was in the "hundreds of thousands of dollars."

Phone and e-mail messages left for Dhingra, Davis, D Squared Solutions and Scintillant were not returned.

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