In the last post, we have written about the a recent FTC action against a major vendor of Internet Security Software, which have pagued millions of PC users all over the world.

We have just found the chargesheet paper of FTC against the same vendor “Innovative Marketing”, which reports the practise used by these fraudsters to scam the Internet Users.

Click Here to read the original Report. Believe me, it is an interesting read.

Some of the excerpts from the report are given below.

DEFENDANTS’ (FRAUDSTERS’) BUSINESS PRACTICES

• The Defendants operate a massive, Internet-based scheme that tricks consumers into purchasing computer security software. Known in Internet parlance as “scareware,” Defendants’ software and the misleading Internet advertising used to promote it -exploits consumers’ legitimate concerns about Internet-based threats like spyware and viruses by issuing false security or privacy warnings to consumers for the sole purpose of selling software to fix the imagined problem.
• The Defendants’ scareware scheme relies on elaborate and technologically sophisticated Internet advertisements that Defendants place with advertising networks and many popular commercial websites. These exploitive ads display to consumers a “system scan” that invariably detects on consumers’ computers a host of malicious or otherwise dangerous files and programs, including viruses, spyware, or “illegal” pornography.
• Once the scan is complete, the Defendants urge consumers to download and install their software to resolve the security or privacy problems detected by the scanner. In many instances, consumers who agree to install the software are then presented with another scan initiated by the Defendants’ software.
• This second, software-based, scan repeats many of the same warnings from the initial scan and urges consumers to purchase the Defendants’ software at a cost of $39.95 or more to resolve the security or privacy issues found by the scanner.
• In reality, the scans displayed in the Defendants’ Internet advertisements and by the Defendants’ software are an elaborate ruse created to dupe consumers into purchasing the Defendants’ security software products. Although the Defendants go to great lengths to make the scans appear legitimate, no actual computer scans take place and the purported virus, spyware, or illegal pornography purportedly detected by the Defendants’ scanners does not exist on
  consumers’ computers.
• Unaware of the Defendants’ trickery, more than one million consumers have purchased the Defendants’ software products to cure their computers of the non-existent problems “detected” by the Defendants’ fake scans.
• Although some consumers later realize they have been defrauded by Defendants and attempt to seek refunds, Defendants routinely delay, obstruct and refuse to honor such requests.

Alex Eckelberry from Sunbelt has also conducted a mini-research, which discovered the hundreds of domains names and Ip addresses used by these scamsters to carry out their operations. He has been blogging about this episode lately here, here and here.

In this backdrop, when you read reports like Thieves Winning Online War from NY Times, these are really disturbing times for the overall Internet Security scenario.