We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
80,259 News Articles

As scareware scammers shift to telemarketing, FTC acts

A federal court has stopped the operations of several companies that allegedly used telemarketers masquerading as computer technicians to scare tens of thousands of consumers into buying unneeded antivirus services.

The order, issued late last month in New York at the request of the Federal Trade Commission (FTC), also froze $180,000 of the defendants' assets.

Most of the alleged scams were based in India and targeted English speakers in the U.S., the U.K., Canada, Australia, Ireland and New Zealand, the FTC said on Wednesday in unsealing the case.

Con artists often use online ads to lure victims to websites with fake antivirus scanners that pretend to fine malware and then sell software to remove it. In the latest cases, the use of boiler-room telemarketing blended old school tactics with the digital world.

"The tech support scam artists we are talking about today have taken scareware to a whole other level of virtual mayhem," FTC Chairman Jon Leibowitz said in a statement.

Five of the companies used telemarketers, while the sixth placed ads with Google, so they would appear on results when a person searched for their computer company's tech support number, the FTC said.

[See also: Organized cybercrime revealed]

In the telemarketing scams, con artists claimed to be with legitimate companies, such as Dell, Microsoft, McAfee and Symantec's Norton antivirus unit. They then directed consumers to a utility area on their computers and pretended to detect malware. The scammers then offered to remove the software for fees ranging from $49 to $450.

Consumers who agreed to pay were sent to a website to enter a code to download a program that gave the telemarketers remote access to their victims' computers. Once in the systems, they pretended to remove the non-existent malware and download otherwise free programs.

The defendants tried to hide from law enforcement authorities by using virtual offices that were actually mail-forwarding facilities, as well as 80 different domain names and 130 different phone numbers, the FTC says.

The alleged swindlers have been charged with unfair and deceptive commercial practices, violating telemarketing sales rules and calling numbers on the Do Not Call Registry. The FTC is seeking a permanent shutdown of the operations and restitution to victims.

The six companies named in the FTC complaint include Pecon Software Ltd., Finmaestros LLC, Zeal IT Solutions Pvt. Ltd., Virtual PC Solutions, Lakshmi Infosoul Services Pvt. Ltd. and PCCare247 Inc. The FTC has also named 14 corporate defendants and 17 individual defendants.

The FTC says it is increasing efforts with international regulators to go after scammers that use scare tactics to get consumers to buy unneeded security software. In the latest case, the FTC worked with authorities in Australia, Canada and the U.K. Microsoft also assisted in the investigation.

Separately, the FTC said on Tuesday that a federal court fined the last defendant in a scareware scam $163 million. In 2008, the FTC charged defendant Kristy Ross with taking part in an operation that used fake online computer scans to pretend to find malware on computers and then sell software to remove it for $40 to $60.

Ross and six other defendants duped more than 1 million consumers in the scam, the FTC says. Victims were lured to the scareware sites through online advertising.

Read more about malware/cybercrime in CSOonline's Malware/Cybercrime section.

Read more about network security in CSOonline's Network Security section.

IDG UK Sites

Windows 10 release date, price, features UK: Staggered release with PCs coming first this summer -...

IDG UK Sites

In defence of BlackBerrys

IDG UK Sites

Why we should reserve judgement on Apple ditching Helvetica in OS X/iOS for the Apple Watch's San...

IDG UK Sites

MacBook Pro 15in preview: better battery life, faster storage and a new discrete graphics chip may...