FTC, AG Sue to Stuff Alleged Pop-up Scheme

UPDATED: The Federal Trade Commission (FTC) and the Washington state Attorney General Rob McKenna have sued a group of companies to halt an operation that barrages consumers with pop-up advertising and demands money to make the pop-ups cease.

The FTC asked a Los Angeles district court to order the defendants, a group of companies that offers movies, sports, and other media through the Movieland Web site, to pay consumers back the money they paid to escape the pop-up cycle.

But a U.S. district court judge denied an FTC request to issue a temporary restraining order; a trial for this case will be scheduled for a later time, the FTC said in a statement Tuesday.

Washington filed suit against the companies in King County Superior Court in Seattle under the state’s computer spyware act.

The FTC, which hounds alleged perpetrators for a number of online scams on behalf of consumers and businesses, said defendants downloaded software that repeatedly barraged consumers’ computers with pop-ups.

The blast of ads was accompanied by music that lasted nearly a minute; the ads could neither be closed nor minimized.

The ads demanded that consumers pay the defendants $29.95 to end the pop-up cycle, claiming that consumers had signed up for a free trial of the defendants’ Movieland Internet download services and did not cancel their so-called membership before the trial period ended.

Hundreds of consumers complained to the FTC, claiming they had never signed up for the free trial, let alone ever heard of Movieland, before the payment demands.

The FTC also said the defendants made it difficult or impossible for consumers to uninstall the software.

For example, consumers attempting to remove it through the Windows Control Panel add/remove function were redirected to a Web page telling them that they had to pay the $29.95 fee to stop the pop-ups.

Some consumers paid the defendants to stop the pop-ups, or paid a computer technician to help them.

The FTC said the scheme is unfair and deceptive and violates federal law, arguing that demanding payment to fix the problem that the defendants created and installing disruptive software that cannot be removed through reasonable means is an unfair practice.

The FTC named California companies Digital Enterprises d/b/a Movieland.com; Triumphant Videos; Pacificon International, d/b/a Vitalix,; Alchemy Communications; Innovative Networks; Binary Source Inc., d/b/a Moviepass.TV; and CS Hotline in the suit.

Also named were Delaware companies Mediacaster, d/b/a Mediacaster.Net and Accessmedia Networks; Wyoming company Film Web, Easton Herd; and Andrew Garroni in the suit.

Updates prior version to clarify that Washington filed suit in Seattle.