Spyware Marketer Fined $163M by FTCWritten by Amanda Lee
October 2, 2012 # 4:35 pm # Industry News, Specials # 4 Comments
Perhaps you’ve seen it before, those pesky, uninvited websites and programs that have popped up onto your computer insisting that you had malware and viruses, so you needed to purchase a scanning software to remove the ³virus² when the real virus was the scheme of the deceptive marketers trying to scare consumers into purchasing their bogus scanning software.
Those of you who were wise to these particular scams, and found yourselves frustrated wasting time removing these forms of “scareware” will be happy to hear the news.
The Federal Trade Commission announced today that The United States District Court for the District of Maryland has placed a $163 million judgment ruling on the final defendant in a deceptive Internet bogus computer scanning software (scareware) and deceptive advertising case that began in 2008 and violated Section 5 of the Federal Trade Commission Act.
In 2008, the FTC put a halt to the operation ran by the Belize incorporated, Ukraine headquarted, Innovative Marketing, Inc., and ByteHosting Internet Services, LLC operating under a web of aliases marketing an array of scanning programs such as WinFixer, DriveCleaner , ErrorSafe, XP Antivirus, WinAntivirus, WinAntiVirusPro, WinAntiSpyware, Popupguard, WinFirewall, InternetAntispy, WinPopupguard, ComputerShield, WinAntispy, PCsupercharger, SysProtect, SystemDoctor and ErrorProtector.
The programs were falsely advertised to provide scans of consumer’s computers and detect false privacy or security issues, including viruses, spyware, system errors and pornography.
Images Source PcHell, Emisoft.com
According to the FTC complaint 08-CV-3233-RDB after consumer complaints knocked the advertisements off of advertising networks the defendants went as far as to create sham Internet advertising agencies that duped advertising networks and websites into accepting their misleading advertisements.
The defendants then used sophisticated coding to conceal the exploitative nature of the ads in order to gain approval for distribution from the advertising networks. Once the ads were placed the ads directed consumers to the defendant¹s exploitative websites and phony virus scans that infected themselves onto consumer’s computers.
Shocked to see that so many viruses had been found on the consumer’s computer, many, the FTC says more than one million, were conned into purchasing the bogus virus scanning software with prices ranging from $30 to $100.
Of the original defendants in the case, four have settled with the FTC and three received default judgments. The Court found that the last defendant, Kristy Ross, individually and as an officer of Innovative Marketing, Inc, jointly liable along with Sam Jain and Daniel Sundin of the $163,167,539.95 million summary judgment. The judgment was ordered to be awarded in the form of consumer redress and disgorgement.