Microsoft sues software maker who tricked Windows users into buying software for non-existent problems

Spam isn't the only computer nuisance that lawmakers and corporations are going after these days. The Washington State Office of the Attorney General filed a suit in cooperation with Microsoft against a software market that allegedly tricked consumers into buying software they didn’t need.

Washington State Attorney General Rob McKenna said in a statement, "The Attorney General’s Office along with Microsoft has yanked the fear factor dial out of the hands of businesses that use scareware as a marketing tool and have spun it toward them."

The filing of the suit was allowed after the improvement of a law in Washington State called the Computer Spyware Act. McKenna continued, "We won’t tolerate the use of alarmist warnings or deceptive ‘free scans’ to trick consumers into buying software to fix a problem that doesn’t even exist. We’ve repeatedly proven that Internet companies that prey on consumers’ anxieties are within our reach."

The Computer Spyware Act not only bans and makes illegal spyware, but any other program that misleads consumers into believing that a problem is present and a fix is needed for security.

Named in the suit are several defendants including makers of Registry Cleaner XP, Branch Software, and Alpha Red. Specifically named in the Registry Cleaner XP filing is company owner James Reed McCreary IV.

The complaint is that the defendants sent multiple pop-ups to Windows users that mimicked the look of actual error messages from Microsoft. The messages reportedly read "CRITICAL ERROR MESSAGE! – REGISTRY DAMAGED AND CORRUPTED" directing users to a site where they could pay for the software, which allegedly did nothing.

According to the Attorney General office statement, the software firms were able to send these pop-ups by taking advantage of computers capable of receiving Windows Messenger Service pop-ups. The service is intended to be used by system administrators on a network to contact computer users and is different from the Windows chat application.

Any computer capable of receiving Net Send messages was vulnerable. The messages routed the user to the site for a free scan of their computer, which always found errors and asked for $39.95 to download software to repair the errors.

Senior Counsel for the Attorney General's Consumer Protection High-Tech Unit, Paula Selis said, "Consumers who visited the Web site were offered a free scan to check their computer – but the program found ‘critical’ errors every time. Users were then told to pay $39.95 to repair these dubious problems."

According to Microsoft, the 50% of its customer support calls are related to crashes blamed on spyware. The penalty if convicted is a fine of up to $2,000 per incident, restitution, and attorney's fees. Some reports say that one IP address received as many as 200 of the pop-ups per day.

Ironically, this suit isn’t the first brought against the same people from Microsoft since 2005 when Washington State's Computer Spyware Act was enacted. The firms were previously sued under the act and the plaintiffs were granted injunctions and settlements.

Microsoft Senior Attorney for Internet Safety Enforcement said, "Microsoft is honored to assist Washington Attorney General McKenna in helping to protect consumers from online threats. Cybercrime continues to evolve, but with public/private collaboration such as this, we can work to champion tougher laws, greater public awareness and, ultimately, stronger protections for online consumers.”

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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