Reparations Being Paid in Malware Scam

The Federal Trade Commission has a holiday surprise for 320,000 consumers who were victims of a "scareware" scam. Starting this week, the agency is mailing out refund checks for an average of $20 apiece.

It’s taken awhile to return the money - the FTC first sued the defendants, who did business as Innovative Marketing Inc. and ByteHosting Internet Services LLC (and a variety of aliases), in December 2008 in U.S. District Court for the District of Maryland. The defendants agreed to a final judgment a year ago that required them to turn over $8.2 million in ill-gotten gains.

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 1 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.

According to court papers, defendant Marc D’Souza and his father, relief defendant Maurice D’Souza, were represented by Garret Rasmussen and Jonathan Direnfeld of Orrick, Herrick & Sutcliffe in Washington.

The settlement also bars Marc D’Souza from any involvement with software that interferes with consumers’ computers; 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.

Consumers who believe they are entitled to a refund or have questions may call the settlement administrator toll free at 1-877-853-3541 or visit www.FTC.gov/refunds http://www.ftc.gov/refunds for more information.

Comments

[John Black]

It is unfortunate that all the FTC was able to do was to seize "ill gotten gains". I know, because I mistakenly installed Antivirus XP as it was held forth as being a Microsoft product. After finding out I was scammed and spending hours trying to find a method to remove the software, I paid a consultant to remove and clean the computer. I was lucky because the consultant was a friend and did not charge me much. I suspect many were not so lucky. Hopefully the FTC will consider these significant less apparent damages in the future when going after companies such as this.