Cybercriminals are employing increasingly persuasive online scare tactics to convince users to purchase rogue security software, according to a report from Symantec Corp.

Rogue security software, or "scareware," is software that pretends to be legitimate security software. These rogue applications provide little or no value and may even install malicious code or reduce the overall security of the computer.

"Scareware creators can scam thousands of people for comparatively small amounts of money all at the same time and make huge aggregate profits," said David Wall, PhD. professor, Centre for Criminal Justice Studies, University of Leeds. "This type of fraud works because the fake security software tricks users into believing they have an immediate threat which only their program can resolve. Ultimately, it's a con. I would advise Internet users to be careful while online and only download from trusted sources."

Marci of Wildomar, California, has experience with such sites. She tells ConsumerAffairs.com that a virus software called Anti Virus 2010 invaded her computer. "This program announced my pc had a virus and my computer was going to crash. Then a screen popped up to remove it. I clicked. It took me to a pay $40 site." Marci writes that in a panic, she paid the $40.

She downloaded the program and says it was a hoax. "I contacted them via email. They sent me a generic reply. In the process of paying, they have all of my information including the last 4 digits of my social. My bad!! The result could be identity theft."

To encourage unsuspecting users to install their rogue software, cybercriminals place website ads that prey on users' fears of security threats. These ads typically include false claims such as "If this ad is flashing, your computer may be at risk or infected," urging the user to follow a link to scan their computer or get software to remove the threat.

According to the study, 93 percent of the software installations for the top 50 rogue security software scams were intentionally downloaded by the user. As of June 2009, Symantec has detected more than 250 distinct rogue security software programs.

The initial monetary loss to consumers who download these rogue products ranges from $30 to $100. However, the costs associated to regain one's identity could be far greater. Not only can these rogue security programs cheat the user out of money, but the personal details and credit card information provided during the purchase can be used in additional fraud or sold on black market forums resulting in identify theft.

To make matters worse, some rogue security software actually installs malicious code that puts users at risk of attack from additional threats. As a result, installing these programs can lower the security posture of a computer while claiming to strengthen it.

For example, rogue programs may instruct the user to lower or disable any existing security settings while registering the bogus software or prevent the user from accessing legitimate security Web sites after installation. This, in turn, leaves users exposed to the very threats the rogue software promised to protect against.

Deceptive ads

There are several methods employed to trick users into downloading rogue security software, many of which rely on fear tactics and other social engineering tricks. Rogue security software is advertised through a variety of means, including both malicious and legitimate Web sites such as blogs, forums, social networking sites, and adult sites.

While legitimate Web sites are not a party to these scams, they can be compromised to advertise these rogue applications. Rogue security software sites may also appear at the top of search engine indexes if scam creators have seeded the results.

To increase the likelihood of fooling users, rogue security software creators design their programs so that they appear as credible as possible, mimicking the look and feel of legitimate security software programs. In addition, these programs are often distributed on Web sites that appear credible and enable the user to easily download the illegitimate software.

Some malicious sites actually use legitimate online payment services to process credit card transactions and others return an e-mail message to the victim with a receipt for purchase -- complete with serial number and customer service number.

Middlemen

Cybercriminals are profiting from a highly organized pay-for-performance business model that pays scammers to trick users into installing bogus security programs. According to the study, the top ten sales affiliates for the rogue security distribution site TrafficConverter.biz reportedly earned an average of $23,000 per week during the 12-month study period of the report, or almost three times the weekly salary of the President of the United States.

These practices are similar to the affiliate marketing programs made popular by online retailers. Affiliate marketing programs reward participating affiliates or members for each visitor or directed to the online retailer's website due to the affiliate's marketing efforts. Through this model, affiliates of rogue software scams can earn between $0.01 and $0.55 for every successful installation.

The highest prices are paid for installations by users in the U.S., followed by the U.K., Canada, and Australia. Some distribution sites also offer their affiliates incentives in the form of bonuses for a certain number of installs, as well as VIP points and prizes such as electronics and luxury cars.

"The findings of our Report on Rogue Security Software make it clear that cybercriminals are willing, eager, and well-equipped to prey on today's Internet user," said Stephen Trilling, Senior Vice President, Symantec Security Technology and Response. "To avoid becoming a victim of such predatory practices, Symantec strongly urges Internet users to make sure they are using the latest security protection and always obtain their security software directly from trusted vendors' websites."

What to do

To protect against rogue security software, Symantec recommends that both enterprises and users:

• Avoid following links from emails, as these may be links to spoofed or malicious websites. Instead, manually type in the URL of a known, reputable website.

• Never view, open, or execute email attachments unless the attachment is expected and comes from a known and trusted source. Be suspicious of any emails that are not directly addressed to your email address.

• Be cautious of pop-up windows and banner advertisements that mimic legitimate displays. Suspicious error messages displayed inside the Web browser are often methods rogue security software scams use to lure users into downloading and installing their fake product.