FTC slaps scareware distributor with $163 million fine

Oct 3, 2012
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FTC slaps scareware distributor with $163 million fine

We've all had it happen to us before: we're browsing the web when we're greeted with a pop-up alert claiming that our computer is infected and that our immediate action is required. Most tech savvy people wouldn't be tricked into falling for that, but for a while, these scams had many computer users legitimately scared. A handful of people involved in one of these scareware scams have been ordered by a US District Court to pay out a whopping $163 million FTC fine today, after it was discovered that they scammed more than 1 million people out of money.

Those people, Kristy Ross, Sam Jain, and Daniel Sundin, were hit with the $163 million fine to repay the victims they ripped off throughout the years. In addition, Ross has been banned from selling software that interferes with a user's computer. Ross and co. were responsible for one of these seemingly endless scareware schemes, alerting Internet-goers to non-existent problems on their computers, and then charging $39.95 and up to "fix" the issues. The scam ran from 2000 to 2008, and in that time, the trio pulled in tens of millions of dollars from confused and scared PC users.

Three other people involved in the case, Marc D’Souza, Maurice D’Souza, and James Reno, settled with the FTC in 2010, and aren't required to pay back the $168 million. The group operated under the name of Innovative Marketing Inc., which bought space for legitimate-looking ads on major websites. When users would click on the ads, they would be taken to an Innovative Marketing website, where they were told that any number of malicious programs were discovered on their computer and then urged to purchase bogus software to fix the issues.

This is a big step in the right direction for the FTC, but unfortunately, scareware still runs rampant today. It's a problem that probably won't ever go away entirely, so users need to stay vigilant when it comes to surfing the Internet and believing those illegitimate alerts. This may not be the last we've heard of scareware, but it's definitely the last we've heard of Innovative Marketing Inc.

[via Threat Post]


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