Malware Alert: FTC Sweeps $26 Million Settlement in Alleged Popup Scam

  • The FTC has reached a $26 million proposed settlement with tech support firms Restoro Cyprus Limited and Reimage Cyprus Limited (collectively, “RCL”) for allegedly marketing their computer repair services using deceptive pop-ups, internet ads, and telemarketing in violation of the FTC Act and Telemarketing Sales Rule.
  • According to the FTC’s complaint, RCL used deceptive tactics to scare consumers into purchasing their computer repair services. Specifically, the FTC contends that RCL used pop-up alerts falsely indicating that consumers’ computers were compromised or infected, urging them to perform a “scan” or “update” that purportedly revealed critical, yet unsubstantiated issues that required immediate attention. Following the scans, the FTC alleges, RCL would urge consumers to purchase its software online to fix the security or performance issues, which subsequently lead to misleading telemarketing interactions suggesting the need for further assistance from an RCL technician. According to the FTC, RCL’s warnings were false, misleading or unsubstantiated, as the companies did not know what security issues, if any, the consumers’ computers had when the pop-ups appeared on their screen.
  • Under the terms of the proposed order, which requires federal court approval, RCL must pay $26 million to the FTC to use for consumer redress. The proposed order also prohibits RCL from making misrepresentations regarding any security or performance problems, or any significant factors related to the sale, marketing, or distribution of their products or services, and from engaging in deceptive telemarketing.