WWW- Two companies selling alleged bogus anti-spyware software and services settled Federal Trade Commission (FTC) charges Thursday that the firms' claims were deceptive and violated federal law.
The owners and operators of Spykiller and Spyware Assassin each claimed to detect spyware -- even when none was on a user's computer -- and then sold consumers anti-spyware software that either did not work or did not work as advertised.
Danilo Ladendoft and Trustsoft, Inc., of SpyKiller agreed in the settlement to pay approximately $1.9 million to settle the FTC charges. The deal also prohibits them from making deceptive claims in the sale, marketing, advertising or promotion of any goods or services, as well as bars the specific misrepresentations used in promoting SpyKiller.
In addition, the FTC claims spam messages promoting the SpyKiller software were not identified as advertising, used false "from" lines, did not include valid postal addresses and failed to provide consumers with notice of and the ability to opt-out of, all violations of the CAN-SPAM Act.
The settlement prohibits future violations of the CAN-SPAM Act.
Thomas L. Delanoy and his corporation, MaxTheater, Inc., makers and marketers of Spyware Assassin, agreed in their settlement with the FTC to pay $76,000, which is the full amount of the FTC's consumer inquiry.
The settlement also bans Delanoy and MaxTheater from selling and marketing any anti-spyware product or service in the future.
In March of last year, the FTC charged that its Spyware Assassin and its affiliates used Web sites, e-mail, banner ads and pop-ups to drive consumers to the Spyware Assassin site.
There, consumers were told the site would scan for free the user's computers to determine whether the machine was infected with spyware.
The FTC claims the scans were phony and Spyware Assassin's representations that spyware had been detected were deceptive.
Further, the FTC states, the anti-spyware software sold by Spyware Assassin for $29.95 did not remove all or substantially all spyware, which is another deceptive claim violating the FTC Act.
In June 2005, the FTC charged Trustsoft with using similar tactics to sell its SpyKiller software.
The FTC alleged the defendants sent pop-up and e-mail messages informing consumers that their computers had been remotely scanned and that spyware had been detected, even though defendants had not performed any such scans.
Although the scan itself was free, consumers usually had to pay approximately $39.95 to enable SpyKiller's removal capabilities. As with Spyware Assassin, the FTC claims SpyKiller failed to remove significant amounts of spyware.
Back story from Info World, March 18, 2005: In a bold move, the Federal Trade Commission has temporarily shut down a software vendor that used allegedly false scare tactics to increase sales. Bold, that is, if it had taken the action -- oh, say -- five years earlier.
The FTC says MaxTheater, maker of Spyware Assassin, tried to scare consumers into buying software through a variety of pop-up ads and e-mail messages that informed consumers their computers had been infected with malicious monitoring software.
Remember those? These pop-up ads would open in the middle of an online session to warn -- in bold capital letters -- that "Your system is infected with spyware." You could close the pop-up, but some of you no doubt wondered if just maybe... .
Well, a friend of mine did. He clicked the ad. And on my computer, no less.
I don't know whether the little rascal was from MaxTheater, but when my friend clicked the pop-up's button, the program bombarded me with ads and inserted itself on top of my home page like an annoying younger sibling. It took a lot of persistence to remove all the cookies, files, and other general nonsense from the system. I would think the system was clean, and I'd happily surf for a couple of weeks and then -- boom! The unwanted Web page would show up again as my home page. It's finally gone (I think), but certainly not forgotten.
According to the FTC, MaxTheater would produce evidence of spyware even on systems that were clean, and even more galling, its $30 program did not actually remove the spyware. The program was a little like an exterminator who crawls under your house, comes up with a board covered in bugs, and then sprays the foundation with water and hands you a hefty bill.
A U.S. court has ordered MaxTheater to suspend its activities until a court hearing on Tuesday. The court could compel the company to give back all the money it made from selling Spyware Assassin. I'm sure that will happen, just like how Enron is going to cough up all the money it hornswoggled from investors over the years.
The FTC also recently issued a report that boldly -- there's that word again -- identifies spyware as "a real and growing" problem. To repeat: bold, that is, if it had taken this action five years earlier.
Several months after holding a spyware workshop, the FTC released a report with the findings and a transcript of the workshop. The report includes remarks by the commissioner of the FTC, whose name is, I kid you not, Orson Swindle.
In the transcript of the workshop sessions, there is a lot of discussion about the differences between adware and spyware and how legitimate adware crosses the line and becomes spyware. The FTC report recommends government and industry actions and asks the business community to come up with a working definition of spyware (to distinguish it from adware). It may sound a bit lame, but at least it's a start to dealing with the problem.
As a side note: I've been writing about new mobile viruses recently, and InfoWorld put together several stories on the subject. You can find some of those stories here.
