Zero Day

Ryan Naraine, Emil Protalinski and Dancho Danchev

FTC issues refunds to scareware victims

By Dancho Danchev | December 13, 2011, 1:40pm PST

Summary: The US Federal Trade Commission announced that it plans to issue refunds to scareware victims, following a settlement with Innovative Marketing.

Have you been a victim of scareware?

If so, there’s a high probability that a refund is waiting for you, just around the corner.

The US Federal Trade Commission announced that it plans to issue refunds to 320,000 known scareware victims, following a settlement with Innovative Marketing — a producer and distributor of fake security software known as Winfixer, Drive Cleaner, and XP Antivirus. — for $8,272,962.

With $100 million in revenues, Innovative Marketing’s case clearly indicates just how profitable the scareware business is.

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Victim, FTC, Refund, Dancho Danchev

Dancho Danchev is an independent security consultant and cyber threats analyst, with extensive experience in open source intelligence gathering, malware and cybercrime incident response.

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jywhy888 7th Mar

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RE: FTC issues refunds to scareware victims

tatiGmail 13th Dec

Ok, I scare people, make $100mil, and return 8 mil to the FTC. Not a bad business model.

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Tell me dear Feds

klumper 13th Dec

What do I get for every system I've cleaned? The numbers are genuinely scary.

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Penalties for such actions should be in percentage of revenue...

olePigeon 13th Dec

Penalties for such actions should be in percentage of revenue, not a fixed fine. It's ridiculous. They should be fined 95% of their revenue until they change their habits, then it can go back for review.

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RE: FTC issues refunds to scareware victims

Hellmaster66 16th Dec

@olePigeon
The penalties should be the prison time. isn't what they did a fraud?

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RE: FTC issues refunds to scareware victims

CSwa913102 16th Dec

@Hellmaster66

Oops. SHRA (should have read ahead.)

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RE: FTC issues refunds to scareware victims

CSwa913102 16th Dec

@olePigeon

It's called extortion. Penalties for such actions should be measured in months and years, not dollars and cents.

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Still too low.....Still gives them a profit of 5%

linux for me 19th Dec

@olePigeon

Should be penalties PLUS the loss of all profits. If it hurts real bad, they they may stop. Otherwise, any profit will encourage them to just continue on.

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RE: FTC issues refunds to scareware victims

Grayson Peddie 13th Dec

What's "innovative" about "Innovative Marketing?" *chuckle*

Yep. Nothing innovative. Give $100 million back to the victims of scareware. happy

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How do I get some of this refund?

rys@... 16th Dec

My system is still screwed up...

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They are crooks!

sfaid 16th Dec

Lets see, they were falsely mislead that they were infected with a real looking message. They paid so much to buy a false product. They spent how much time getting rid of the garbage they were lured into buying. I would say that everyone should get at least double their money back!

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They are crooks!

sfaid Updated - 16th Dec

And the owners should get some jail time! Paid for with anything left from the profits!

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RE: FTC issues refunds to scareware victims

K.G. Campbell II 16th Dec

OK I'll try this again, maybe my message was too long. I have gone through this for 8 different people. Too bad I've done this on a volunteer basis. Approx 15-16 hours lost on each unit from zero's to fully ready for service. So gee, they owe me about 130 hours of my life back. Would I be able to charge them 'market' rate @ $40.00 an hour???? Not only the people that I helped out were victims, but I as well. So They would be able for restitution as well????

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RE: FTC issues refunds to scareware victims

K.G. Campbell II 16th Dec

Well, I did some checking - through the links on this page; it seems that I should have documented every single case where/when/how this had happened to be able to sucessfully report the wrongdoings. But, when the actual injuction was placed was back in 2008 (which was the time I had my first encounter of having to fix someone's rig); supposedly it was cease and do not persist... Well, I've had to fix 7 more after that; the last one was for the non-profit where my girlfriend worked just a month ago. That one was Nasty, But after 3 hours I was actually able to reclaim the files only because of a program named 'spybot' was already installed on the computer. I couldn't get to sys settings, taskmanager even the start menu. Even when I restored the files on a fresh O.S. I had to change the folder view so one could see the files for the properties had been changed to 'hidden'.

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RE: FTC issues refunds to scareware victims

RobertMoore12@... Updated - 16th Dec

As a person who works on computers in my spare time, I've had to restore about 15 computers from this garbage. I'm glad I know what I'm doing and can help. The guilty parties should have to pay back 100 million plus another 100 million in fines. Then spend some time in jail. This crap isn't fun.

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RE: FTC issues refunds to scareware victims

Steve I. 3rd Jan

They should have their "business" dissolved, all assets of this illegal enterprise forfeited, and do substantial prison time. Preferably in a tough state prison, like Lompoc. Give 'em all long blonde wigs (glued on) and breast implants before they go away too. Makes for a *nicer* stay.