Spyware Warrior

[TeMerc]

Court Halts Spyware Operations

One Operator to Pay More Than $4 Million; Another Ordered to Stop Collecting Consumers Personal Information

An operation that deceptively downloaded spyware onto unsuspecting consumers’ computers, changing their settings and hijacking their search engines, has been halted by a federal court at the request of the Federal Trade Commission. The judge has ordered the operators to give up to more than $4 million in ill-gotten gains. The court also ordered a halt to another spyware operator’s stealthy downloads and barred the collection of consumers’ personal information, pending trial.

The FTC sued both operations charging that the stealthy downloads of spyware were unfair and deceptive and violated federal law. Although the companies used different techniques to direct consumers to their Web sites and implement the downloads, the FTC alleged that both operations hijacked consumers’ computers without the consumers’ knowledge or approval, secretly changed their settings, and barraged consumers with pop-up ads. The spyware and other software the defendants installed caused many computers to malfunction, slow down, or crash, causing consumers to lose data stored on their computers.

The FTC alleged that Sanford Wallace and his company, Smartbot.Net, exploited a security vulnerability in Microsoft’s Internet Explorer’s Web browser in order to distribute spyware. The spyware caused the CD-ROM tray on computers to open and then issued a “FINAL WARNING!!” to computer screens with a message that said, “If your cd-rom drive’s open . . .You DESPERATELY NEED to rid your system of spyware pop-ups IMMEDIATELY! Spyware programmers can control your computer hardware if you failed to protect your computer right at this moment! Download Spy Wiper NOW!” Spy Wiper and Spy Deleter, purported anti-spyware products the defendants promoted, sold for $30.

In a second case, the FTC charged that Odysseus Marketing and its principal, Walter Rines, lured consumers to their Web site by advertising bogus software they claimed would allow consumers to engage in anonymous peer-to-peer file sharing. According to the FTC, the spyware and other software bundled with it hijacked search engines and reformatted search engine results, placing Rines’ clients first. The FTC recently amended its complaint, charging that the defendants also distributed their spyware by exploiting security vulnerabilities in Internet Explorer and other applications, and that the defendants’ spyware captured consumers’ personal information, including their names, addresses, e-mail addresses, telephone numbers, Internet browsing and shopping history, and information about their online transactions. Once captured, the amended complaint alleges, the information was transmitted to defendants’ Internet servers, where they compiled the information into a database in order to sell access to the data.

FTC
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[suzi]

Hehe -- this is good news for sure. I like the $4 million part. Maybe Rines (picklejar) got off too easy with $227,000.
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Former Microsoft MVP 2005-2009, Consumer Security
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[wawadave]

spamford got slamdforded
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[datababe]

And some more coverage:

http://news.zdnet.com/2100-1009_22-6068794.html

I'm lovin' it.