Accused Scareware Operators Settle with FTC for $8.2 Million

The Federal Trade Commission reached an $8.2 million settlement with the operator of a reputed scareware operation.

The purported head of a rogue antivirus operation has agreed to pay roughly $8.2 million to the Federal Trade Commission to bring a 2-year-old case to a close.

According to the FTC, Marc D'Souza and his father, Maurice D'Souza, will pay the money to settle accusations that they profited from a scheme to scam consumers with promises of bogus security software. Marc D'Souza was named as a key player in the operation by the FTC, while his father did not participate directly but is believed by the FTC to have profited from the scheme.

The duo did business under a variety of company names, including Innovative Marketing and ByteHosting Internet Services, LLC, and maintained offices in multiple countries, the agency said. According to the FTC (PDF), the defendants used online ads to offer customers a system scan. The scan would turn up malware on the person's computer and urge them to purchase bogus antivirus software for $40 to $60 to fix the problems, the FTC said.

The FTC filed a complaint against seven defendants identified as being part of the scheme on Dec. 2, 2008. The agency claims the group conned more than 1 million consumers into buying their products, which went by names such as Winfixer, Drive Cleaner and Antivirus XP.

Two other defendants-one individual and one company-previously settled the charges against them. The FTC obtained default judgments against three other defendants, and will continue litigation against the sole remaining defendant in the case, Kristy Ross.

"At the time Symantec published our Report on Rogue Security Software in late 2009, we had detected over 250 distinct rogue security software programs," said John Harrison, group product manager for Symantec Security Response. "During the reporting period of the study, Symantec received reports of 43 million rogue security software installation attempts from the more than 250 distinct samples.

"These scams are often successful because they focus on users via fear tactics and other social engineering tricks to trick users into thinking they are infected and getting them to pay money to remove these fake infections," he added.