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Court orders developer of scareware programs to pay $163 million

Posted By Ashraf On October 3, 2012 @ 12:45 AM In General Tech,Windows | 5 Comments

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In this day and age, most semi-tech savvy computer users know what scareware is. For those that don’t, scareware is not malware, per se, but it is software that make you think like you have a problem on your computer (when you actually don’t) and charge you a large sum of money for the privilege of cleaning up that “problem”.

One of the most notorious scareware operators is (was) a company by the name of Innovative Marketing. Through the use of scareware programs like WinFix and WinAntiVirus, Innovative Marketing was able to pull in roughly $60 million in revenue from 2000 to 2008. They were so successful that it is reported they had 600 employees in 2011; 600 people for the purpose of using scareware programs to scam people out of their money. Well judgement day for Innovative Marketing has arrived.

A Maryland federal court has ordered Innovative Marketing founders Sam Jain and Daniel Sundin, and Innovative Marketing former senior vice president Kristy Ross to pay $163 million in fines. This is a result of a case brought against Innovative Marketing by the Federal Trade Commission on behalf of roughly 3,000 people who were scammed by the company. (Note: Jain and Sundin were ordered to pay the $163 million back in 2010, and Ross is now ordered to be equally liable for that amount.)

FTC’s complaint was originally brought against a total of eight people related to Innovative Marketing. Four of those people already settled while three, including Jain and Sundin, were found guilty due to failure to “appear and participate in the litigation”. So that left Ross as the primary target for the case and, aside from paying the huge fine, Ross has been ordered to “be permanently restrained and enjoined from the marketing and sale of computer security software and software that interferes with consumers’ computer use, as well as from engaging in any form of deceptive marketing”. Ross, of course, tried to play the innocent card by claiming she was simply an employee of the company and not a “control person” but the judge dismissed her argument.

Has justice been served? Well hard to say. But at least something has been done.

[via TechCrunch [2], ArsTechnica [3] | image via Wikipedia [4]]


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URL to article: http://dottech.org/83430/court-orders-developer-of-scareware-programs-to-pay-163-million/

URLs in this post:

[1] Image: http://dottech.org/wp-content/uploads/2012/10/winfixer_scareware.png

[2] TechCrunch: http://techcrunch.com/2012/10/02/scaring-users-into-buying-bogus-antivirus-and-porn-scrubbing-software-gets-160m-fine/

[3] ArsTechnica: http://arstechnica.com/tech-policy/2012/10/ftc-gets-a-163-million-judgment-against-scareware-operation/

[4] Wikipedia: http://en.wikipedia.org/wiki/File:Winfixer-message.png

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