'Scareware' Operators to Pay $8.2 Million to FTC, In Settlement

by Amar Toor on January 28, 2011 at 04:10 PM

The father-son team behind a massive 'scareware' scam will have to pay $8.2 million to the Federal Trade Commission, in order to settle a complaint filed by the government agency.

Marc D'Souza and his father Maurice were allegedly at the center of the scam, which tricked Internet users into buying fake security software to combat computer infections that didn't really exist. The operators reportedly sold more than a million copies of their false software, which they marketed under names like Winfixer, Drive Cleaner and Antivirus XP. As PC World reports, the FTC will use the settlement money to reimburse consumers who purchased the software, which typically cost $39.95 or more.

According to documents (PDF) filed in a Maryland U.S. District Court, Marc D'Souza operated one business involved in the scareware scheme and held an officer position at another. His father wasn't explicitly involved in the execution of the scam, but profited from it, nonetheless. The operators allegedly spread their advertisements by posing as legitimate companies, and striking deals with advertising networks and websites. Instead of promoting the companies, however, the advertisements hawked the fake software, thanks to a hidden programming code embedded within the ads.

After the FTC filed a complaint against the D'Souzas, the court immediately ordered them to halt operations in 2008. In addition to paying the FTC, the settlement bans Marc D'Souza from being involved in the development or sale of any software that affects consumers' PCs, and prohibits him from registering domain names with false information.

Next >> The Web's Biggest Scams

Tags: antivirus xp, AntivirusXp, complaints, court, drive cleaner, DriveCleaner, fraud, ftc, ftc settlement, FtcSettlement, law, malware, marc dsouza, MarcDsouza, money, scam, scareware, security, top, Web, winfixer

source: PC World

Comments

AnthonyJan 28th 2011 7:37PM

Highest Ranked

So sell a million copies at $39.95 each and pay a fine of $8.2 million. Still have $31 million profit.

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teltech54Jan 30th 2011 9:17AM

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Why does the government interfere with scammers? People who buy this junk have learned a valuable lesson by buying from these people. Hopefully they will have learned the meaning of the term "buyer beware". If not, then they are too stupid to be allowed to use a computer on the internet and they deserve what they get.

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ITGUY1024Jan 30th 2011 9:54AM

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@teltech54 you wouldn't be saying that if your somewhat PC illiterate grandparent or parent got scammed by them. these people run javsscript that install a program on your PC that has these messages pop up CONSTANTLY made to look just like legit antivirus/antispyware programs. they basically make you pay 40 bucks to remove a "virus" that they themselves put in, this is not a simple "scam" but malicious hacking for profit which is A CRIME. for a guy who pretends to be a tech you sure mouth off a lot. guys like you gives us technicians a bad name...just another insecure nerd acting the elitist

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ITSVCMGRFeb 2nd 2011 7:43AM

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I agree with ITGUY. These scumbags planted malicious proggies on unsuspecting users systems, then sold those users the fix, for a profit. Like the man said - that is a crime. It's called fraud. It's akin to me throwing a brick through your plate glass window, then showing up the next day to sell you a new window. Using teltech's flawed logic, it would be your fault for having a window in the first place, because you were too stupid to know that it was breakable. Further agree with ITGUY that blaming the user is NOT my idea of technical service. Maybe, teltech, you should consider a career change - do you know how to work a mop wringer?

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KevinJan 30th 2011 11:44AM

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This is like someone setting your house on fire, then showing up with a ladder to rescue everyone. I have removed these programs from friends and relatives computers and it is a pain. These guys are scum! If you are tech savvy enough to make this malware, create something legit!

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ITGuyfromNYJan 30th 2011 12:41PM

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This scareware is something more than just being scammed into buying their product. They place their ads with embedded codes on reputable sites. If you hit one of those sites the ad loads the software on your machine. Unless you know what you are doing, you are then at their mercy. For most folks they do not know what to do such as getting to the internet from another machine and searching for advice on how to rid your machine of the software. It will include logging on in Safe Mode, removing the software from the registry and then locating it on your c:/ drive to remove it from there.

This has happened to me on two occasions over the last ten years and it can be frustrating. These guys paying only 8 million dollars in fines are ridiculous. They should reimburse every user who has encountered their software.

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ArgonJan 31st 2011 1:39AM

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Why Aren't they in jail ??????????????????????

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ScottJan 31st 2011 2:06PM

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Seriously - They made $40 million and a penalty of $8 million....get real! Who cares if you pay $8 million and make $32 million.

This is no different than car companies that have flaws and pay off deaths because they know that's cheaper than fixing the cars.

Sick society

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