Scareware pusher loses appeal against epic $163 million fine

  • 3 March 2014
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The US Federal Trade Commission (FTC) is celebrating what it calls a "huge victory for consumers", after an appeal court threw out an attempt to overturn a massive fine imposed on Kristy Ross, a former representative of scareware marketing firm Innovative Marketing Inc. (IMI) which pushed fake security products such as WinFixer and XP Antivirus.

Ross was the last hold-out in the case after several others accepted punishments handed to them by courts, including an $8 million fine imposed on Marc D’Souza, described by the FTC as "one of the key defendants behind the scam".

The case got under way in late 2008 when the FTC brought an action against the Belize-registered IMI, along with fellow scareware marketer ByteHosting Internet Services, LLC, operating out of Ohio.

The action requested a restraining order preventing the firms, which operated under numerous aliases in many countries, from pretending to have scanned people's computers and found security problems.

This technique is the go-to trick for scareware scammers, also referred to as "rogue anti-virus", which usually manifests as a pop-up that warns victims of spurious infections found on their system. They are then offered a cleaning utility for a fee, which is usually around the same price as real consumer-grade security products.

Of course the infection is bogus - the utility is usually nothing more than a flashy front-end that mirrors the standard look and feel of real products - and the fee goes into the pockets of the scammers.

In some cases, more aggressive pop-ups are used, with features that make them hard to close. In other cases the "anti-virus" product actually includes backdoors or other malicious features.

In the case of IMI and ByteHosting, by the time the FTC got their restraining order in place, over a million victims were thought to have been hit by the scam.
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Userlevel 7
I first became intersted in computer security the first time I saw one of these fake-AV malwares. It was all new to me, but pretty easy to figure out how it worked.
Glad they got this company, although it is just a drop in the bucket of many, many more.