FTC Settles Action Against Tech Support Scam Defendant

The FTC has announced that a settlement with an individual that will pay more than $100K and be permanently banned from offering tech support services. According to the FTC, the defendant provided substantial assistance to an India-based tech support scam in which purported technicians illegally obtain older consumers’ personal information without their permission while deceiving those consumers into purchasing phony or otherwise suspect technical support services.

According to the Commission, the tech support telemarketers contact consumers by either cold-calling them and pretending to be representatives of a well-known technology company, or by using pop-up advertisements disguised as security alerts that direct consumers to immediately call a telephone number to protect their computer.

Regardless of the initial method of contact, as alleged by FTC attorneys, the scheme proceeds similarly once the telemarketer has the consumer on the phone. Emphasizing the need for immediate action, the telemarketer purportedly claims that the consumer’s computer is at risk and that the telemarketer can assist the consumer but first needs remote access to the consumer’s computer.

As set forth in the complaint, once remotely connected, the telemarketer purports to confirm the existence of a serious cyber-threat, sometimes claiming that a hacker will soon be able to access the consumer’s personal information, including financial account numbers, social security numbers, and passwords. It alleges that the telemarketer sometimes tells the consumer that a hacker is attempting to steal a large sum of money from the consumer’s bank account. Imparting a sense of urgency, alleges FTC lawyers, the telemarketer claims it will install security software to resolve the problem in exchange for a substantial sum of money.

Defendants were charged with misrepresenting that the security software is affiliated with the U.S. government, and that junk software or older versions of security software were installed – that were available elsewhere for free or for a lower price.

The FTC also alleges that telemarketers frequently remove copies of the consumer’s tax returns and other documents found on the computers.

Since 2013, consumers have allegedly filed well over 500 complaints about the tech support telemarketers on Consumer Sentinel, a consumer complaint database maintained by the FTC.

The FTC agreement to suspend part of the judgment based upon defendant’s inability to pay, and expressly premised upon the truthfulness, accuracy and completeness of sworn financial statements and related documents financial representations”) submitted to the FTC, including personal financial statements, bank statements and tax returns. As with all partially suspended judgments, the suspension will be lifted if it is determined that the defendant failed to disclose any material asset, materially misstated the value of any asset, or made any other material misstatement or omission in the financial representations identified above. If the suspension of the judgment is lifted, the judgment becomes immediately due for the full amount, less any payment previously made.

This matter is part of the tech services-related enforcement sweep announced last year.

The Stipulated Order can be seen, here.

Contact the author at rnewman@hinchnewman.com.

Richard B. Newman is a regulatory litigation lawyer and advertising compliance attorney at Hinch Newman LLP.

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