FTC gets a $163 million judgment against scareware operation
A federal court in Maryland has imposed a $163 million opinion and judgment against defendants from Innovative Marketing in a massive scareware operation. The company sold the scareware under the names WinFixer, WinAntiVirus, and WinAntiVirusPro, among other monikers. Kristy Ross and two of the company's founders—Sam Jain and Daniel Sundin—were determined to be jointly liable for that amount. Ross was not present during the two-day bench trial.
This case was specifically brought against Ross, but her case is part of a larger one against eight of the company's leaders. In the court filing, the judge explained that of these original eight defendants, "four have settled with the FTC, and three are in default and have had judgments entered against them for failure to appear and participate in this litigation." However, the judge added that as founders, Jain and Sundin were to be made "jointly and severally liable" for the $163 million judgment.
In a recent judgment (PDF), Ross was determined to have “misrepresented, expressly or by implication, that they had conducted scans of consumers’ computers and detected security or privacy issues, including viruses, spyware, system errors, and pornography.”
The $30 to $100 program would trick users into thinking their computer was infected with malware, and would then sell software to rectify this fictitious problem. More than a million copies of this software were sold. This resulted in approximately 3,000 customers filing complaints with the Federal Trade Commission (FTC). Innovative Marketing took in around $60 million in revenue between 2000 and 2008, when the first legal action was brought.
http://arstechnica.com/tech-policy/2012/10/ftc-gets-a-163-million-judgment-against-scareware-operation/
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