ScareWare Marketer Gets Whacked With $163 Million Judgment

The Federal Trade Commission (FTC) said today that a federal court has inflicted a judgment of more than $163 million on the final defendant in its case against an operation that used “scareware” tactics in order to trick consumers into believing their computers were infected with malware, and selling them software to “fix” a non-existent problem.

In 2008, the FTC charged Kristy Ross and six other defendants with tricking more than a million Internet users into paying $39.95 or more for software to remove non-existent malware that appeared to be detected by scans.

The FTC said the operation utilized online ad networks and other popular web sites to promote “technologically sophisticated” Internet ads that displayed to consumers a “system scan” that would invariably detect a host of malicious or otherwise dangerous files and programs on consumers’ computers. The bogus “scans” would then encourage consumers to buy the defendants’ software for $40 to $60 to remove the said malware.

According to the FTC’s original complaint, the fake security software included products such as WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus.

In addition to the $163 million judgment, the court order permanently prohibits Ross, from selling computer security software and any other software that interferes with consumers’ computer use, and from any form of deceptive marketing.

Under a settlement announced in 2011, defendant Marc D’Souza and his father, Maurice D’Souza, were ordered to give up $8.2 million in fraudulent gains. Two other defendants previously settled the charges against them; the FTC said that is obtained default judgments against three other defendants.

Of course the FTC is is unlikey to ever collect on the $163 million.