$84,000 settlement first in state’s Spyware Cleaner case
SEATTLE – Washington State Attorney General Rob McKenna announced today that an Oregon man is the first defendant penalized under Washington’s new computer spyware act. Zhijian Chen, of Portland, Ore., will pay nearly $84,000 in fines and consumer restitution for marketing bogus anti-spyware software through deceptive means.
“Let this be a warning to other online advertisers – when you attempt to harm or deceive, you will pay in Washington,” McKenna said. “We will not tolerate those who try to profit by preying on consumer’s fears of spyware and other malware.”
A five-month investigation by the Attorney General’s Consumer Protection High-Tech Unit found that Chen promoted Secure Computer’s Spyware Cleaner through Net Send messages sent to personal computers throughout the United States. The messages simulated system warnings.
“Chen made thousands of dollars by sending invasive messages intended to mislead consumers into believing their computers were infected with a dangerous virus and that Secure Computer’s software was the fix,” McKenna said. “In fact, nothing could be further from the truth.”
Chen is the first defendant to receive a judgment in the Attorney General’s case against New York-based Secure Computer and associates in the United States and India. Filed in January in U.S. District Court in Seattle, the lawsuit is the office’s first under the state’s 2005 Computer Spyware Act.
By agreeing to the settlement, Chen admits violating Washington’s 2005 Computer Spyware Act, as well as the state Consumer Protection Act.
“Our spyware act not only protects consumers from spyware purveyors. It also makes it illegal to persuade someone to download software by misrepresenting that a program is necessary for security or privacy,” McKenna said.
One Net Send message from Chen stated: “Message from SYSTEM to ALERT … Warning! We detected a virus on your computer! We were unable to remove it automatically so please visit www.fixscan.com and download our software to remove Adware, Spyware and Viruses from your computer!”
Net Send is a Windows operating system command traditionally used by network administrators to broadcast messages to computer users about service outages. Some advertisers have found a way to manipulate that technology to send pop-up dialogue boxes to computers that appear to be official system warnings.
Users who visited the Web site in Chen’s Net Send message were redirected to a site owned by Secure Computer, where they were encouraged to take advantage of a “free scan” to check for malicious programs. The state’s investigation found that this so-called scan always detected spyware on a user’s computer, even if none existed. In order to remove this falsely detected spyware, users were instructed to purchase the full software product.
Chen was paid a commission equal to 75 percent of the $49.95 purchase price of Spyware Cleaner each time someone purchased the product.
Chen will pay $16,000 in restitution to consumers in who purchased Spyware Cleaner as a result of receiving his Net Send message. He will also pay $24,000 in civil penalties and nearly $44,000 in attorneys’ fees and costs.
The settlement prohibits Chen from sending Net Send messages for the purpose of advertising any product or service. He is also prohibited from creating a false sense of urgency, exclusivity or need for products or services. Prior to advertising anything, Chen must consult with an attorney to ensure the proposed ad and manner of transmission don’t violate any laws or terms of his settlement.
Washington’s suit alleges that Secure Computer, based in White Plains, N.Y., has marketed and sold Spyware Cleaner since at least 2004 through pop-up ads, spam e-mails, and deceptive hyperlink ads. The ads offer a “free scan” of the computer. The investigation found that this scan always detected spyware on a user’s computer, even if none existed.
The state’s investigation also showed that the full version of Spyware Cleaner, available only by purchase, failed to detect spyware on a deliberately infected computer and erased the Hosts file, rendering the computer vulnerable to potential attacks from unwanted programs.
Consumers who purchased Spyware Cleaner as a result of receiving a Net Send message may request a refund by filing a complaint with the Attorney General’s Office online at www.atg.wa.gov or by calling the Consumer Protection Division to request a complaint form. A toll-free number, 1-800-551-4636, is available to Washington residents who wish to request a complaint form. Residents of other states should file online or contact one of the office’s Consumer Resource Centers directly; phone numbers are available online. Consumers must file complaints within three months.
The Attorney General’s Office is a leader in investigating and prosecuting high-tech fraud cases. Last week, the office announced a settlement with SoftwareOnline.com, of Sammamish, Wash., concerning its InternetShield and Registry Cleaner products. SoftwareOnline will refund affected consumers and pay $190,000 to resolve allegations that it misrepresented the extent to which its software is necessary for security, bombarded potential customers with pop-up ads and used deceptive billing practices.
Kristin Alexander, Public Information Officer, Attorney General’s Office, (206) 464-6432, email@example.com
Paula Selis, Assistant Attorney General, (206) 464-7662
Katherine Tassi, Assistant Attorney General, (206) 389-3974