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FTC Halts "Anti-Spyware" Scam

June 23, 2005
An operation that used bogus "scans" and illegal spam to market an anti-spyware program that didn’t work as claimed has had its assets frozen and been barred from making deceptive claims by a preliminary injunction order issued by a U.S. District Court judge.

The Federal Trade Commission alleges that the operation violated federal laws and has asked the court to permanently bar the deceptive marketing and order redress for consumers.

The FTC alleges that to capitalize on legitimate consumer concerns about spyware and induce consumers to download its anti-spyware product, “SpyKiller,” the operation aggressively and deceptively marketed SpyKiller, using the Web sites of affiliates, banner and pop-up ads, and spam.

The FTC alleges defendants sent pop-up and e-mail messages informing consumers that their computers had been remotely “scanned” and that spyware had been “detected” even though defendants had not performed any such scans. The defendants’ marketing materials urged consumers to access the SpyKiller Web site to get a “free scan” for spyware.

While the SpyKiller “scan” was running, the program displayed a status report entitled “Spyware Found on your PC:” that included a category called “Live Spyware Processes.” In fact, the FTC alleges, this category deceptively identified anti-virus programs, word processing programs, or any of the processes running on the system as spyware. Then, even though the “scan” itself was free, consumers had to pay roughly $39.95 to enable SpyKiller’s “removal” capabilities.

Defendants promised in their marketing materials that SpyKiller would find and remove “all” spyware, including “all traces” of particular spyware on consumers’ computers. However, the FTC complaint alleges the software failed to remove significant amounts of spyware, including specified spyware defendants claimed on their Web site to remove. The agency alleges that the deceptive claims violate the FTC Act.

The FTC also alleges that spam messages promoting the SpyKiller software contained similar deceptive claims, failed to identify themselves as advertising, used false “from” lines, gave no valid postal addresses, and failed to provide consumers with notice of and the ability to “opt-out,” in violation of the CAN-SPAM Act.

The court entered a temporary restraining order on June 1, 2005, and a stipulated preliminary injunction order on June 14, 2005. The agency is seeking a permanent ban on the deceptive claims and will ask the court to order consumer redress from defendants Trustsoft, Inc. and its Houston, Texas-based principal, Danilo Ladendorf.

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