Spyware Vendor to Pay $1 Mln in Settlement

Secure Computer, which marketed its "Spyware Cleaner" via spam and pop-ups, has settled with Washington State's attorney general for $1 million in fees and penalties.

Computer software maker Secure Computer of White Plains, New York, which was accused of marketing its Spyware Cleaner product via deceptive spam and pop-up scans, has agreed to settle with the Washington State attorney general for $750,000 in legal fees, $2000 in damages, and $75,000 in reimbursements to Washington State customers who purchased Spyware Cleaner.

The company was accused of violating Washington State’s 2005 Computer Spyware Act by marketing its product via deceptive spam and pop-up advertisements. The ads would offer to perform free spyware scans on a user’s computer, but would always report a problem with the scanned computer and offer Spyware Cleaner as a solution.

According to the attorney general’s office, more than 1,100 Washington State residents purchased Spyware Cleaner since it was introduced in 2004; under the terms of the settlement, Secure Computer will contact each buyer and offer a $50 refund on the product.

The settlement does not include an admission of guilt or wrongdoing, but authorities are upbeat that the settlement sends an important message to online fraudsters. “This settlement with Secure Computer is a significant victory for the Attorney General’s Consumer Protection High-Tech Unit, Washington consumers and the online marketplace,” said Washington Attorney General Rob McKenna. “It sends a strong message to Internet businesses that they must promote their products ethically and legally. We won’t tolerate deceptive marketing such as ’scareware’ that preys on consumers’ fears about spyware and online threats.”

Secure Computer killed Spyware Cleaner as soon as the lawsuits hit, and Secure Computer itself is now out of business; nonetheless, the settlement forbids it from using deceptive marketing techniques in the future, and to monitor the marketing efforts of its affiliates to make sure they comply with the settlement.

Secure Computer was sued by Microsoft at the same time Washington State filed its case; the Microsoft suit was reportedly settled in September, 2006.