Washington Settles First Spyware Suit

The Attorney General’s office for the state of Washgington has its first notch under a new law designed to punish spyware makers and, in this case, make them pay.

Attorney General Rob McKenna announced yesterday a $1 million settlement with Secure Computer LLC, over a case that was first brought in January.

Under terms of the settlement, an estimated 1,145 Washington residents who purchased the company’s Spyware Cleaner software and, in some cases, its Popup Padlock product, will receive a refund.

The Washington Attorney General’s Office sued Secure Computer LLC in January over its false claims of spyware infestation. The suit was brought after numerous consumer complaints, according to Paula Selis, Senior Counsel in the AG’s office.

The AG conducted its own tests and found that Spyware Cleaner was popping up alerts on user computers with false claims of spyware infection, and then made the $49.95 sales pitch for the software. In its investigation, the AG’s office found that not only was there no spyware despite the alert, Spyware Cleaner failed to find and remove legitimate spyware infections on computers, according to Selis.

As part of the consent decree, Secure Computer and president Paul Burke agreed to pay $200,000 in civil penalties, $75,000 in restitution for consumers, and $725,000 in state attorneys’ fees and costs. The agreement does not include an admission or finding of wrongdoing.

Secure Computer also appears to be history. Its phone number is disconnected, the company’s Web site is gone and e-mail queries to the company bounced back. However, Selis said Burke has promised to make good on the financial terms of the consent decree.

Selis said she would hope this case dissuades other spammers, but admits “It’s always hard to gauge that. Spyware is still a persistent and widespread problem and I can’t pretend that by filing one lawsuit we’ve been able to make a large dent in it,” she said.

Selis said 15 states in the U.S. have anti-spyware laws on their books, eight of them modeled after Washington’s. But only three states – Washington, New York and Texas – have actually gone after spyware creators. Many spammers are outside of the US, which makes chasing them considerably more difficult.

Still, she said consumers should complain because that brought about action. There’s certainly no dearth of complaints from people who’ve received spyware. When you get a critical mass of complaints, it helps target who your complaints ought to be against,” she said.

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