FTC Nails Two Spyware Sellers For Tricking Users

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January 06, 2006 (2:53 PM EST)

By Gregg Keizer , TechWeb Technology News

Two companies accused of deceiving computer users into believing their systems were infected with spyware have settled with the Federal Trade Commission and will pay back over $2 million in ill-gotten gains, the agency said Thursday.

The lawsuits, which were filed in March 2005 against the makers of SpywareAssassin and in June against the creators of Spykiller, charged that both were tricking users into paying for anti-spyware software after they'd run bogus scans on the consumers' PCs and supposedly detected spyware and adware infections.

No such infections were actually present on the scanned PCs, alleged the FTC's civil lawsuits.

This "scareware" practice spread during 2005, and even with several FTC actions, continued. In an earlier interview, Patrick Hinojosa, the chief technology officer of Panda Software, said that the scam was too lucrative to disappear. ""We're going to see a lot more like this, like mushrooms after a rain," he said.

The settlements announced Thursday, however, put an end to two groups' scareware tactics. The makers of SpywareAssassin must pay $76,000 and are banned from selling or marketing any anti-spyware product in the future. The creators of Spykiller, meanwhile, will fork over about $1.9 million to the federal agency.

Settlement documents in PDF format can be downloaded from the FTC site for the SpywareAssassin or Spykiller lawsuits.