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Warning! Why you should be scared of scareware.

The Federal Trade Commission released a warning about scareware. Here is what it looks like and how you can protect yourself from scareware.I have to admit I spend more time with my computer than I do with just about anyone else, as it is involved in nearly all my life's activities. The computer is my primary tool at work and it somehow gets itself involved in many of my leisure time as well. You would think that since the two of us spend so much time together I could trust it. Unfortunately, that isn't the case.

The Federal Trade Commission released a warning that reminded me of an incident with my own computer. Not long ago, my computer popped a warning onto the screen. It said it was infected with a virus and required urgent action. It told me the virus protection I had failed and that I needed to click the icon in order to upgrade the protection and resolve the issue. Like a protective father, I panicked. My computer was under attack. I immediately agreed to upgrade my protection and within minutes discovered the ruse. My computer and I were victims of scareware. We had been deceived into downloading terribly sticky viruses that refused to be removed. It took extensive computer surgery and rehabilitation before my computer and I were back together and working again.

The reality is that living online is like walking through back alleys at night. There are bad things out there that have the potential to hurt you. Look at the warning from the Federal Trade Commission below. Having your computer crash is costly in time and money. Protect yourself by taking preventative measures against this type of loss; the first should be awareness of the scams you may come across while online.

From the Federal Trade Commission website:

Operator of Deceptive "Scareware" Scheme Will Pay More than $8 Million to Settle FTC Charges

An operator of an online “scareware” scheme will pay more than $8 million to settle Federal Trade Commission charges that he used deceptive ads to trick consumers into thinking their computers were infected with malicious software, and then sold them software to “fix” their non-existent problem.

As part of the FTC’s ongoing efforts to protect consumers from online scams, the agency cracked down on the scareware operation, filing a complaint against seven defendants who allegedly operated the scheme in 2008. The agency charged that the defendants did business using the company names Innovative Marketing, Inc. and ByteHosting Internet Services, LLC, operated using a variety of aliases, and maintained offices in various countries.

The defendant whose settlement was announced today will be required to turn over $8 million in ill-gotten gains so it can be used to reimburse victims of the scam and will be barred from the deceptive practices

In December 2008, at the request of the FTC, a U.S. district court ordered a halt to the massive scheme. According to the FTC’s complaint, the defendants falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers’ computers. The FTC alleged that the defendants conned more than one million consumers into buying their software products such as Winfixer, Drive Cleaner and Antivirus XP to remove the malware the bogus scans had supposedly detected.

The FTC charged that the defendants used elaborate and technologically sophisticated Internet advertisements that they placed with advertising networks and many popular commercial websites. These ads displayed to consumers a “system scan” that invariably detected a host of malicious or otherwise dangerous files and programs on consumers’ computers. The bogus “scans” would then urge consumers to buy the defendants’ software for $40 to $60 to clean off the malware.

Under the proposed settlement order, Marc D’Souza and his father, Maurice D’Souza,
will give up $8.2 million in ill-gotten gains. The FTC alleged that Marc D’Souza was one of the key defendants behind the scam. It charged Maurice D’Souza as a relief defendant who did not participate in the scam, but allegedly profited from it. The order bans Marc D’Souza from any involvement with software that interferes with consumers’ computers. It also bars him from:

  • making deceptive claims in connection with computer security software;
  • using domain names registered with false information; and
  • misrepresenting that he is authorized to act on behalf of third parties.

The FTC wishes to thank the Canadian Competition Bureau for its invaluable assistance in this matter.

The Commission vote to accept the proposed settlement was 5-0. The settlement was filed in the U.S. District Court for the District of Maryland. Two other defendants – one individual and one company – previously settled the charges against them. The FTC obtained default judgments against three other defendants. Litigation will continue against the sole remaining defendant in the case, Kristy Ross.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated final orders have the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

The Quarter Roll is published to provide personal insights and opinions on everyday ways of saving and managing money, budgeting, and reducing debt. The Quarter Roll does not give professional accounting, legal, or investing counsel. The ideas, examples, and advice presented on this site are solely the opinion of the authors based on his or her personal experiences. All photos courtesy of The Quarter Roll, iStockphoto, or Dreamstime. ©  All rights reserved. This site is best viewed when using Adobe Flash Player. free money magazine