The Federal Trade Commission has announced that two foreign companies will pay $26 million to settle claims their violated the FTC Act and the Telemarketing Sales Rule when they duped older consumers into spending tens of millions of dollars on unnecessary computer repairs.
The FTC filed its complaint yesterday in federal court, but also announced the settlement with Restoro Cyprus Limited and Reimage Cyprus Limited. The FTC will used the $26 million to provide restitution to those who were impacted by the scam. Under the terms of the enforcement action, the two companies are also barred from misrepresenting security or performance issues or any other material related to the sale, marketing, or distribution of any product or service, and from engaging in deceptive telemarketing.
Consumers would get fake pop-ups on their computers, alerting them that their computers had been infected with a virus or malware. They were then urged to scan their computers, and the scans would reveal purported serious issues that needed immediate attention.
Consumers were then urged to buy software to fix the alleged problems, and then were told to call a number to activate the software. Telemarketers then attempted to sell additional services by accessing the consumers’ computers and misrepresenting that routine errors were more signs of malware. What was needed, the telemarketers said, were live technicians which would cost hundreds of dollars more to bring in and fix the “problem.”