The FTC crackdown on scareware

A pop up window appears on a PC screen in Tokyo, Japan. The computer virus known as the MSBlast or LovSan has infected more than 210,000 computers causes machines to crash repeatedly.

The penalty: $163, 167, 539.95. The crime? Using something called "Scareware." If you've used a PC in the past several years, you've probably seen some version of it. This particular fraudulent scam on the Internet delivers fake pop ups while you're online that say some version of "you've got a virus," followed by a prompt to solve the problem and clean up your computer with the help of your credit card. Of course, once you're that far, they're quite possibly helping you dissassemble your computer's security system as well. 

This week, the FTC is continuing a multinational crackdown on this particular kind of scam, shutting off phone lines, cutting off bank accounts, and even delivering that whopping $163 million fine to at least one of the accused scareware users. Kurt Baumgartner, security researcher for computer security firm Kaspersky Lab, says it's a longstanding scam. 

"The user has been online, you know, in the middle of their day, they're rushing through something, they're trying to find an image and they get redirected to a website that in the background silently installs this malware. And then all of the sudden all these pop ups start showing up on their computer, saying, 'WARNING: Your machine is infected".'

What's striking is that some of the companies allegedly targeting home computer users were well-staffed, with call centers overseas that had people ready to convince you your PC was about to kick the bucket if you didn't pay up. And according to a VP of marketing at McAfee, who told us off the air that the internet security company completely supports the latest FTC ruling, Scareware isn't even the new state-of-the-art internet scam, either. The next big thing, according to the McAfee rep? Something called "ransomware." You can probably guess the move there, right? Hostile hackers convince you that you've got a virus, gets into your computer, and locks it up so that you can't access any of your files. Then, someone calls you up pretending to be from the FBI, and tells you that you've got illegal files on your PC and that you're going to have to pay through the nose to get it unlocked. 

About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio

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