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.”

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Avast Limited was accused of collecting consumers’ browsing information for the past nine years through browser extensions and antivirus software that was installed on consumers’ computers. The company captured web searches and the pages that consumers visited, which revealed information such as their religious beliefs, health concerns, political leanings, financial status, and more, according to the FTC. All the while the company was telling consumers its products would protect consumers. Avast’s browser extension, for example, told consumers that it would

Avast Limited was accused of collecting consumers’ browsing information for the past nine years through browser extensions and antivirus software that was installed on consumers’ computers. The company captured web searches and the pages that consumers visited, which revealed information such as their religious beliefs, health concerns, political leanings, financial status, and more, according to the FTC. All the while the company was telling consumers its products would protect consumers. Avast’s browser extension, for example, told consumers that it would “block annoying tracking cookies that collect data on your browsing activities” and promised that its desktop software would “shield your privacy. Stop anyone and everyone from getting to your computer.” 

The company failed to anonymize the data it was selling to buyers, who could use the information to track specific users.

Along with paying the $16.5 million fine, the company has also agreed to the following requirements as part of the settlement with the FTC:

• Avast will be prohibited from selling or licensing any browsing data from Avast-branded products to third parties for advertising purposes;
• The company must obtain affirmative express consent from consumers before selling or licensing browsing data from non-Avast products to third parties for advertising purposes;
• Avast must delete the web browsing information transferred to Jumpshot and any products or algorithms Jumpshot derived from that data;
• Avast will be required to inform consumers whose browsing information was sold to third parties without their consent about the FTC’s actions against the company; and
• Avast will be required to implement a comprehensive privacy program that addresses the misconduct highlighted by the FTC.

A copy of the proposed settlement can be accessed by clicking here.

The Background: Shopgala, which does business as Surveys2cash, operates three websites that offers consumers free samples or the opportunity to be paid for taking online surveys. Consumers are required to register their personal information, such as names, addresses, dates of birth, telephone numbers, and email addresses in order to be eligible to participate. When filling out the form, consumers were required to check a box to opt in to the following disclosure:

• By checking the box I consent to receive phone sales calls or SMS text messages – Msg and data rates may apply – from Shopgala and our marketing partners on the landline or mobile number I provided event if I am on the federal or state do not call registry. I understand these calls and SMS text messages may be generated using an autodialer and may contain pre-recorded messages and that consenting is not required to participate in the offers promoted. I understand that I may revoke consent at any time. Text STOP to opt out and HELP to receive help.
• The marketing partners was linked to a page that listed 110 different companies.
• Shopgala did not offer free samples or pay people for taking surveys — they aggregated these offers that are publicly available without any registration required.
• The company was accused of violating the state’s Consumer Protection Law by failing to disclose it was collecting data for the purposes of lead generation, failing to disclose that personal information may be sold to third parties, and failing to obtain express consent to be contacted, among other violations.

The Settlement: The company denied it violated the Telemarketing Sales Rule and the Consumer Protection Law and cooperated with the Attorney General’s investigation.

The company must:

• clearly disclose to consumers in manner that is easily accessible that Respondent is collecting “Consumer Data” for purposes of lead generation
• clearly disclose to consumers in manner that is easily accessible its policies and procedures relating to Respondent’s sharing and selling of “Consumer Data” to third parties

among other changes.

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Who’s Involved: The companies were owned by Taylor Welch and Christopher Evans. Payton Welch and Ashton Shanks worked there as employees. The companies involved are: WE Capital, LLC; Traffic and Funnels, LLC; and Evans and Welch Holdings, LLC.

What They Have to Do: As a result of the consent order, the companies are:

• Prohibited from making deceptive earnings claims
• Prohibited from deceiving consumers
• Required to turn over money. Taylor Welch will turn over $600,000 and Evans $400,000.

The actual monetary judgment against the defendants is for $16,363,073.11, but most of that has been suspended because the defendants don’t have the money to repay it. Consumers allegedly paid more than $29 million to the defendants between 2018 and 2022.

What They Did: The defendants are accused of running a scheme called “The Sales Mentor” where they deceived consumers into paying hundreds or thousands of dollars for telemarketing training programs that were rarely, if ever, delivered. Videos promoting the scheme told consumers that the field of telemarketing sales could earn incomes of up to $20,000 per month. They also claimed to have access to a waiting list of companies looking to hire consumers who completed the program.

The Last Word: “Traffic and Funnels lured people looking to work and earn an income with false or unfounded earnings claims, even after receiving legal notices from the FTC about the illegality of such conduct,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to crack down on deceptive earnings claims that cheat consumers.”  

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