'Scareware' Operators to Pay $8.2 Million to FTC, In Settlement
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. However, it doesn't really matter since the duo actually made about $40 million in sales.
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.