Lawsuits were filed today in the Western Washington US District Court against New York based Secure Computer, naming company president Paul E. Burke, website owner Gary Preston and several of the companies affiliates alleging, among other things, that their application Spyware Cleaner falsely reports spyware on users' computers and the use of aggressive and deceptive marketing techniques to mislead users in order to purchase the software. The Microsoft suit also alleges that the company used email spam and Windows Messenger pop-ups suggesting that the software was sponsored by or endorsed by Microsoft and illegally used name and trademark to frighten users.
Other allegations include that the spyware scan reported normal Windows registry keys as spyware and warned that "every moment the user leaves spyware on their computer the spyware could be doing damage". Spyware Cleaner was found be unable to detect most real spyware in testing. The supposed free scan actually downloaded the program to the user's computer without notice and erased the Hosts file. The Hosts file can be used to block unwanted web sites. The lawsuit named several of the company's affiliates and noted that affiliates could sign up with ClickBank, a large affiliate marketing organization. The affiliates earned 75% of the $49.95 cost of the program on each sale. This article says:
If the allegations in this case are true, Secure Computer could pay dearly. The Washington spyware act imposes a penalty of $100,000 per violation, and the company is also looking at penalties of $250 per violation of the CAN-SPAM Act, as well as $500 and $2,000 per violation, respectively, under Washington's antispam and consumer protection laws.
Based on the money that Secure Computer has made off the product, (Attorney General) McKenna estimated that thousands of users have been affected and that the penalties will amount "to millions of dollars."
The Washington State Attorney General's lawsuit is available here (PDF). Spyware Warriors live for this kind of news! Score one for the good guys. One rogue company down and 250 + left to go. It's worth noting that a number of the rogue anti-spyware apps listed on the Rogue/Suspect Anti-Spyware page at SpywareWarrior.com are marketed through ClickBank as well. A list of their Computing and Internet products can be seen here. At the time I'm typing this, Spyware Cleaner remains on the first page of that list.
Update: The Seattle Time story says:
McKenna said today that his office wants to hear from people who have purchased the program or performed the free computer scan that the Web site offers. Those people should file an online complaint at http://www.atg.wa.gov or call 1-800-551-4636.