"Prized," a software application that ostensibly let users earn points by playing certain games or downloading other apps, was in fact a tool to deliver malware that would "mine" virtual currency, the Federal Trade Commission said on Monday.
The FTC and New Jersey attorney general said they settled charges with the developers of Prized, which had pledged to users that the app was free of malware.
"Hijacking consumers' mobile devices with malware to mine virtual currency isn't just deplorable; it's also illegal," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement.
The app from defendants Equiliv Investments and Ryan Ramminger was delivered to consumers through the Google Play Store and Amazon App Store. The FTC said thousands of consumers downloaded it in the belief that earned points could be used to buy gift cards, clothes and other rewards.
"Consumers downloaded this app thinking that at the very worst it would not be as useful or entertaining as advertised," acting New Jersey Attorney General John J. Hoffman said. "Instead, the app allegedly turned out to be a 'Trojan Horse' for intrusive, invasive malware that was potentially damaging to expensive smartphones and other mobile devices."
The FTC explained that "Virtual currencies are created by solving complex mathematical equations, and the complaint alleges that the app attempted to harness the power of many users' devices to solve the equations more quickly, thus generating virtual currency for the defendants." That caused both power drain on users' batteries and extra data use, the FTC said.
In the settlement, the defendants are forbidden from distributing malware-laced apps and had all but $5,200 of a $50,000 judgment suspended.