FTC Takes Aim at Tech Support Scareware Scams

 
 
By Jeffrey Burt  |  Posted 2012-10-03 Email Print this article Print
 
 
 
 
 
 
 

The agency puts a halt to six such tech support cons, part of a larger effort to stop phony tech support companies from scamming consumers.

The Federal Trade Commission is expanding its efforts against online scammers who aim to con people into buying unneeded antivirus software and services by falsely telling them that their PCs are infected with malware.

The FTC has filed charges against six companies involved in tech support scams; they allegedly ran “scareware” schemes on tens of thousands of victims, and a U.S. District Court judge—at the agency’s request—ordered a stop to the scams and froze the assets of the companies involved in the scams. The orders against the companies—most of them based in India—come a day after the final defendant in another scareware case was ordered to pay $163 million in restitution.

Though unrelated, the companies involved in the cases ran familiar scams: Using either telemarketing calls or online ads, the companies would falsely convince victims that their computers were riddled with malware. The scammers would then trick the victims to buying antivirus software to get rid of the nonexistent malware.

In the most recent investigation, the FTC said Oct. 3 that it targeted 14 companies and 17 individual defendants. Among those targeted were Pecon Software, Finmaestros,  Zeal IT Solutions, Virtual PC Solutions, Lakshmi Infosoul Services and PCCare247, along with individual defendants in each case.

According to the federal agency, five of the scammers would contact victims through telemarketing calls, with the sixth using Google ads that would appear when consumers searched the Web looking for the tech support phone numbers of their computer companies.

The scammers, once they had the consumers on the phone, would say they were with such legitimate tech companies as Dell, Microsoft, McAfee and Norton, and that they had detected malware on their systems. They then would charge the victims hundreds of dollars, saying they would remotely access the computers and fix them.

They targeted consumers in English-speaking countries, including the United States, the U.K., Canada, Australia and Ireland.

FTC Chairman Jon Leibowitz said in a statement that the agency has been aggressive in pursuing such tech support scam cases, and that the latest companies “have taken scareware to a whole other level of virtual mayhem.”    

In those tech support cons, the scammers would point victims to a utility area of their computer, telling them that that indicated the presence of malware in the systems. They then would offer to rid the systems of the viruses for fees of $49 to $450. Once the consumers agreed, they were directed to a Website to enter a code or download software that enabled the scammers to remotely access the systems, according to the FTC.

Once inside the computer, they acted as though they were removing malware and then downloaded what would otherwise be free programs.

According to the FTC, the scammers tried to avoid detection by using virtual offices that turned out to be mail-forwarding operations, and by using 80 disparate domain names and 130 different phone numbers.

The companies were charged with violating the FTC Act through deceptive commercial practices. They also were charged with violating the Telemarketing Sales Rule and illegally calling numbers listed on the Do Not Call Registry.

According to Bloomberg, the court froze $180,000 in assets.

The day before, a federal court issued a judgment of $163 million against a person involved with another tech support scareware scam from a case dating back to 2008. FTC officials said that scam involved more than a million consumers who were tricked into buying software to remove malware that was not on their computers.

The scammers used online ads that showed consumers a system scan that supposedly indicated there were malicious files on their computers. The scans would prompt the victims to buy the scammers’ antivirus software for $40 to $60 to get rid of the malware.

A U.S. District Court in Maryland ordered a halt to the scheme in 2008, and through a settlement in 2011, a father and son were ordered to pay $8.2 million in restitution. Two other defendants settled the charges against them, and default judgments were issued against three others.

Kristy Ross was the last of the defendants in the case, and along with the $163 million judgment, the court also prohibited her from selling security software or any other software that interferes with consumers using their computers. She also was banned from any form of deceptive marketing.

 
 
 
 
 
 
 
 
 
 
 
 
 

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