'Scareware' Scam Leads to $163M Fine, More Crackdowns by FTC

By Ed Silverstein October 05, 2012

Another defendant has gotten a major fine for her alleged role in a “scareware” computer scam that tricked consumers. It comes just as U.S. officials continue their crackdown on virus-cleaning scams.

A federal court imposed a judgment of over $163 million on the defendant, the Federal Trade Commission (FTC) announced this week.

Image via Shutterstock

In addition, the court prevented Kristy Ross from selling computer security software and any other software that interferes with consumers’ computer use, and from deceptive marketing, according to an FTC statement.

Ross claims she was only an employee of Innovative Marketing – a company charged in the case. She added she was not a "control person," and was not aware of the wrongdoing.

The FTC alleges the defendants used computer “scareware” to trick consumers to suspect that their computers were infected with malicious software, and then sold them a software product – even though they had no problem.

In 2008, the FTC charged Ross and six other defendants with conning more than one million consumers into buying software they didn’t need.

The defendants also used ads which showed a “system scan” that always detected malicious files and programs on consumers’ computers, the FTC said.

The bogus product cost consumers $40 to $60. The U.S. District Court in Maryland stopped the scheme.  Defendant Marc D’Souza and his father, Maurice D’Souza, were ordered to give up $8.2 million from company revenue. Two other defendants settled charges. And the FTC got default judgments against three other defendants in the case.

The FTC froze the assets of more alleged scammers, who trick computer users to pay for bogus computer viruses.

The FTC said the operations – mostly based in India – targeted consumers in the United States, Canada, Australia, Ireland, New Zealand, and the United Kingdom.

Five of the six operations used telemarketing “boiler rooms” to call consumers. The sixth put ads on Google which showed up when consumers searched for their computer company’s tech-support telephone number.

Edited by Brooke Neuman

TechZone360 Contributor

Related Articles

Jeff Bezos, Elon Musk Square Off on Rocket Firsts

By: Doug Mohney    11/25/2015

On Monday, November 23, Blue Origin successfully flew the first fully reusable rocket into space, giving the company first bragging rights. Founder Je…

Read More

Autonomous Car Technology Takes New Leap Forward With Ford, Uber

By: Larry Alton    11/24/2015

The age of the self-driving car is nearly upon us, or at least that's what major technology and automotive companies are hoping. There have been major…

Read More

Unusual but Fun Tech Ideas for 2015

By: Rob Enderle    11/24/2015

Well, it's the week of the big sales, and many of us are planning to buy that special someone a special something. I figured I'd join my peers and poi…

Read More

Locus Telecommunications is Challenging the FCC's Authority, Claiming Due Process Violations

By: Special Guest    11/24/2015

One of a handful of prepaid calling card companies slapped with a $5 million fine by the Federal Communications Commission (FCC or Commission) for its…

Read More

Kaspersky: Three Out of Four Users Have Trouble Spotting Big Threats

By: Steve Anderson    11/23/2015

We all know that spending on cybersecurity has been on the rise lately, as everyone from major corporations to military groups ramp up their cyberdefe…

Read More