FTC orders computer repair scammers to pony up $26M for fraud

The Federal Trade Commission (FTC) is ordering two tech support firms to pay $26 million in fines for scamming customers into buying computer repair services they did not actually need.

Remember those annoying computer screen pop-up messages – purportedly from Microsoft Windows – stating that your computer may have a virus and to scan now?

The FTC was able to nab two companies responsible for creating the intrusive on-screen marketing spam, and now the firms will be forced to pay $26 million in restitution to the consumers who fell for the sham ads.

The FTC said the shady tech support companies used deceptive marketing practices – primarily targeting senior consumers – that would trick the person into signing up for computer repair services “regardless of the actual health” of the individual’s computer.

As part of the scam, the consumer was first lured by the fake Microsoft Windows pop-up, urging the person to “scan” their computer “to avoid more damage.”

No matter the state of the individual’s computer, the scan would identity serious issues that needed immediate attention.

Microsoft Windows Pop-up

“These companies used scare tactics and lied about threats to consumers’ personal computers to bilk consumers, particularly older consumers, out of tens of millions of dollars,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

Levine said the money will be used to pay back the consumers duped into purchasing online software – at prices ranging from $27 to $58 – to rid their computer of “alleged viruses or malware” found by the company’s so-called “performance and security” scan.

The two firms who ran the scheme, Restoro Cyprus Limited and Reimage Cyprus Limited, have been operating the scheme since at least 2018, according to the FTC complaint.

Additionally, the FTC said even after the consumer was conned into buying the unnecessary software, the scam continued.

The consumers were given a number to call to “activate” the software, which would connect them to Restoro and Reimage telemarketers, who would then “assess” the computers and attempt to sell them even more bogus services.

The FTC said the telemarketers would claim routine computer errors and messages were actually signs of malware, viruses, and other security issues that could only be fixed by one of the company’s technicians, costing the consumer hundreds of dollars more.

The firms are charged with violating the FTC Act and the Telemarketing Sales Rule (TSR), which prohibit unfair or deceptive practices in commerce and outlaw companies from misrepresenting goods and services.

The two Cyprus-based firms used “false and unsubstantiated claims about the performance and security of consumers’ computers in the marketing of their purported computer security and repair services,” the case summary states.

The FTC order, which must first pass approval in federal courts before it goes into affect, also prohibits the companies from further engaging in any similar sales or marketing practices.

“We have taken decisive action to halt this scheme and return money to consumers,” Levine said.

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