Spyware Operation Fined $2M

A spyware operation that promised protection from viruses and spam but
instead installed malware agreed today to pay a $2 million fine to settle
Federal Trade Commission (FTC) charges of false and deceptive practices.

The settlement also includes a suspended judgment of $8.5 million for
alleged violations of the FTC Act.

Named in the complaint are Enternet Media, Conspy & Co., Lida Rohbani, Nima
Hakimi and Baback Hakimi, all based in California.

Last year, a Los Angeles federal judge froze the operation’s assets and ordered
it shut down after the FTC filed a complaint.

According to the FTC, the defendants and their affiliates hit targeted
Internet users with pop-up windows warning that the consumers’ browsers were
defective and offered free upgrades or security patches.

If consumers declined the free downloaded, the pop-up windows kept
reappearing.

When consumers did download the offer for free security, their computers
were infected with spyware that interfered with the operation of the
computer. The spyware was often difficult or impossible to remove.

The downloads included tracking software that followed consumers’ movements
around the Internet.

In addition, the software changed consumers’ homepage settings and inserted
new toolbars into browsers that displayed advertising even when the browsers
were not activated.

In a variation on the scheme, the pop-ups offered free music files, cell
phone ring tones, photographs, wallpaper and song lyrics. As with the
alleged security downloads, consumers instead received spyware.

According to Wednesday’s settlement, the defendants are permanently barred
from interfering with a consumer’s computer use, including but not limited
to distributing software that tracks consumers’ Internet activity or
collects other personal information.

The defendants are also prohibited from making misleading representations
about the performance, benefits or features of any type of software code,
file or content.