FTC Settles with Two Defendants in Bogus Computer Scan Case
Two defendants in a case involving a massive “scareware” scheme will settle
Federal Trade Commission charges of deceptive advertising and forfeit more than
$100,000 in assets that were frozen last year at the Commission’s request.
The two settling defendants were part of a massive deceptive advertising
scheme that tricked more than a million consumers into buying “rogue” computer
security products, including WinFixer, WinAntivirus, DriveCleaner, ErrorSafe,
and XP Antivirus, according to the FTC’s complaint. The scheme allegedly relied
on deceptive advertisements featuring bogus computer “scans” that falsely
claimed to detect viruses, spyware, and illegal pornography on consumers’
computers.
The settlement imposes a judgment of nearly $1.9 million against two
Cincinnati-based defendants, James Reno and ByteHosting Internet Services, LLC.
This amount represents the gross revenues these two settling defendants realized
from the alleged scam. Under the settlement, all but $116,697 of the judgment
will be suspended based on the defendants’ inability to pay the full amount. If
the defendants misrepresented their financial condition, they will be obligated
to pay the full amount.
The settlement prohibits James Reno and ByteHosting from using deceptive
“scareware” advertising tactics and from installing malicious programs on
consumers’ computers. The settlement also permanently bars Reno and ByteHosting
from ever again doing business with their co-defendants. The settlement does not
affect the FTC’s ongoing case against the remaining defendants in the suit.
The Commission vote authorizing the settlement was 4-0. The settlement was
filed on June 12, 2009 in the U.S. District Court for the District of Maryland,
and is subject to approval by the court.
NOTE: This stipulated final order is for settlement purposes
only and does not constitute an admission by the defendants of a law violation.
A stipulated final order requires approval by the court and has the force of law
when signed by the judge.
The Federal Trade Commission works for consumers to prevent fraudulent,
deceptive, and unfair business practices and to provide information to help
spot, stop, and avoid them. To file a complaint in English or Spanish, visit the
FTC’s online Complaint
Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints
into Consumer Sentinel, a secure, online database available to more than 1,500
civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s
Web site provides free information on a variety of consumer
topics.
MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs
202-326-3707
STAFF CONTACT:
Ethan Arenson Bureau of Consumer Protection
202-326-2204
