Two huge telemarketing operations that used software designed to trick consumers into thinking they had problems with their computers now have problems of their own -- real problems. The Federal Trade Commission announced on Wednesday that it obtained a court order that temporarily shuts down the companies based on the FTC's charges that they've duped tens of thousands of consumers out of more than $120 million.
The FTC alleged that the Florida-based companies, accused in two different actions, led consumers to think they had technical issues with their computers and, therefore, needed the companies' tech help. The sales pitches were hardcore and deceptive, the FTC said, particularly considering the computers didn't actually have problems.
"These operations prey on consumers' lack of technical knowledge with deceptive pitches and high-pressure tactics to sell useless software and services to the tune of millions of dollars," Jessica Rich, director of the FTC's Bureau of Consumer Protection said in a statement. "There's no excuse for it, and we are pleased the court has taken steps to temporarily shut down these scams while our lawsuit proceeds."
Consumers have been peppered by such scams over the years, and the government has recently moved against a few of them. Just last month, the FTC said it had shut down another alleged scam in which callers pretended to be tech support for such companies as Facebook (FB) and Microsoft (MSFT).
Here's how the FTC said the latest scam worked: Consumers would download a free version of software that's supposed to improve computer performance. The software runs a supposed system scan and identifies all sorts of problems and errors.
Then the users are told that to repair the problems they'll need to buy the software for $29-$49. After doing that, the FTC said, they would be directed to call a phone number to supposedly activate the software. The FTC alleges that consumers were then pounded with sales pitches to buy computer repair services and more software.
Furthering the deception, the FTC said, was the telemarketers' demand to provide remote access to their computers, supposedly to enable the activation. Those who agreed were shown phony information that made it appear as though their computers had major problems and required up to $500 of repair work.
The FTC lawsuits allege the companies violated federal consumer protection laws, telemarketing sales rules and the Florida Deceptive & Unfair Trade Practices Act.
Defendants are PC Cleaner Inc.; Netcom3 Global Inc.; Netcom3 Inc., also doing business as Netcom3 Software Inc.; and Cashier Myricks, Jr.; and telemarketers Inbound Call Experts LLC; Advanced Tech Supportco LLC; PC Vitalware LLC; Super PC Support LLC; Robert D. Deignan, Paul M. Herdsman and Justin M. Wright. Defendants in the other case include Boost Software Inc. and Amit Mehta, and telemarketers including Vast Tech Support LLC, also doing business as OMG Tech Help, OMG Total Protection, OMG Back Up, downloadsoftware.com, and softwaresupport.com; OMG Tech Help LLC; Success Capital LLC; Jon Paul Holdings LLC; Elliot Loewenstern; Jon-Paul Vasta; and Mark Donahue.