FTC Slams Door on Tech Support Scammers

The Federal Trade Commission has put a stop to a handful of tech-support scams based mainly in India that promised to remove viruses or other malware from users’ computers.

The scams primarily involved telemarketers contacting people in the United States and other English-speaking countries, falsely telling them that their computers were infected with malware and offering costly solutions to the nonexistent problems.

“The FTC has been aggressive — and successful — in its pursuit of tech support scams,” said FTC Chairman Jon Leibowitz. “And the tech support scam artists we are talking about today have taken scareware to a whole other level of virtual mayhem.”

Larger Crackdown

The news comes a day after a U.S. judge slapped a US$163 million on several defendants after the FTC complained they were tricking consumers into thinking their computers were infected with malware.

The “scareware” distributors reportedly led more than 1 million computer users to believe their devices contained malicious software, including viruses, spyware, system errors or pornography. The group would then contact the user through realistic-looking online advertising and offer to rid the computer of that malware for $40-$60.

Judge Richard Bennett of the U.S. District Court in Maryland handed down the majority of the $163 million fine to defendants Kristy Ross, vice-president of Business Development for the Ukraine-based Innovative Marketing, Sam Jain and Daniel Sundin. The hefty fee is reportedly almost triple the $60 million the trio brought in from their scam operation between 2000 to 2008.

Neither the FTC nor the counsel for the defendants responded to our request for comment on the story.

Big-Time Internet Crime

As online services and mobile devices become more prominent in daily life, the courts are still trying to navigate how to crack down on some branches of Internet infractions, including privacy, defamation and antitrust issues, said Norm Pattis, criminal defense lawyer at The Pattis Law Firm.

“The law always lags behind changes in technology,” Pattis told TechNewsWorld. “The Internet and our inveterate gullibility yields vast new possibilities for those intent on committing fraud. Unfortunately, that also means that prosecutors will have a lot more power to charge folks with crimes.”

But viruses and scareware have been around nearly as long as consumer devices have, said Michael Cernyar, cybercrime attorney based in Los Angeles, since the Internet opened a new frontier for con artists previously confined to smaller-scale scams.

“This type of scam has been going on for years,” Cernyar told TechNewsWorld. “It’s really a virus that doesn’t physically harm the computer, but does take it over the operating system with a repetitive message. It is likely intercepting one of the control blocks to the operating system and enters into an indefinite loop-the-loop. It’s a simple fix for anyone who has computer knowledge, but it’s simpler and quicker to pay the money. It’s extortion — computer style.”

Step Up, Law Enforcement

The traditional nature of the crime should make the justice system and law enforcement more well-versed on cracking down on similar scareware scams, said Cernyar, although he noted that’s not always the case. Even though it’s a common crime, the vast scope of the Internet make it difficult for small, under-resourced agencies to take on the case.

“Many law enforcement agencies do not wish to take on a computer investigation, so the agency typically discourages the victim from reporting the crime or outright refuses to even take a report,” he said. “Typically, it’s the local agency that doesn’t know where to begin in such an investigation.”

A lack of tech-savvy law enforcement officials can also lead to obstacles in a potential investigation, said Cernyar.

“The typical computer crime leaves a digital trail,” he said. “The average computer criminal knows how to manipulate the trail away from themselves. So, if the investigator is not thorough it is easy to wrongfully accuse someone other than the perpetrator. So many times a criminal case involving digital evidence may have two victims.”

Until more investigators are better equipped to combat Internet crime, he said, there is a responsibility on behalf of the FTC to alert consumers of potential scams and how to prevent cyber attacks.

“There should be more public service announcements by the FTC regarding Internet and cybercrime,” he said. “Educating the public in the various types of Internet crimes would be very beneficial for all.”

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