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Spyware Spammer Fined in Washington State

June 8, 2006

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Washington State has reached a settlement with a New Hampshire man accused of using Microsoft's name in ads to con consumers into buying a software program that falsely claimed computers were infected with spyware.

"Affiliate marketing is growing in popularity as a method for promoting online businesses," Attorney General Rob McKenna said. "While this can be an effective outreach strategy, it creates the potential for deceptive practices such as false advertising, spam and spyware. Online advertisers must act ethically and are responsible for reviewing the methods used to send ads and the information used to substantiate ad claims."

Seth Traub, of Portsmouth, N.H., is the third defendant to settle in the Attorney General's first lawsuit under Washington's computer spyware act. The state alleges that Traub advertised Secure Computer's Spyware Cleaner program using Google AdWords. He will pay $2,000 in legal costs and attorneys' fees.

Traub's ad took the form of a hyperlink that read "Microsoft AntiSpyware." It appeared prominently in search results when a computer user looked for "Microsoft spyware cleaner" or "Microsoft antispyware." The accompanying description declared: "Guaranteed 100% Removal Of All Spyware, Instant Free Download."

Computer users who clicked on the ad were taken to a Secure Computer Web site rather than a Microsoft site. Traub was paid a commission equal to 75 percent of the $49.95 purchase price of Spyware Cleaner each time someone purchased the product.

"The Attorney General's Office alleges that Seth Traub deceptively represented that Spyware Cleaner is a Microsoft product or sanctioned by Microsoft," McKenna said. "His ad also misrepresented that the program would remove all spyware. In fact, our investigation found that Spyware Cleaner not only failed to detect most spyware on an infected computer, it left that computer more vulnerable to attacks."

The settlement does not include any admission or finding of wrongdoing, but prohibits him from illegally using trademarks, making unsubstantiated claims, or otherwise deceiving consumers in the context of any advertisement for products or services.

The Attorney General's Office filed its lawsuit against Secure Computer in January in U.S. District Court in Seattle, following a five-month investigation by the office's Consumer Protection High-Tech Unit.

The state's suit claims Secure Computer has marketed and sold Spyware Cleaner since at least 2004 through pop-up ads, spam e-mails, and deceptive hyperlink ads that offer a "free scan." The state's investigation found that this scan always detected spyware on a user's computer, even if none existed.

The investigation also showed that the full version of Spyware Cleaner, available only by purchase, failed to detect most spyware on a deliberately infected computer and erased the Hosts file, which can be used to block unwanted programs.

The lawsuit brings charges against Secure Computer LLC, based in White Plains, N.Y.; company president Paul E. Burke; and Gary T. Preston, who is listed as the owner of Secure Computer's Web domains. Traub, Zhijian Chen, of Portland, Ore., and Manoj Kumar, of Maharashtra, India, were charged in connection with advertising Spyware Cleaner.

Chen admitted violating Washington's Computer Spyware Act and Consumer Protection Act as part of a settlement reached in April. He will pay nearly $84,000 in fines and consumer restitution for promoting Spyware Cleaner through Net Send messages sent to personal computers throughout the United States. The messages simulated system warnings.

Preston settled in May and will pay $7,200 in legal costs and attorneys' fees. He allegedly allowed his name to be used as an alias in business dealings by Secure Computer.

The settlement does not include any admission or finding of wrongdoing, but prohibits him from assisting any person or organization in disguising its identity from the public or law enforcement.

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