Attorney general sues under anti-spyware law

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New York company is accused of deception

By TODD BISHOP AND JOHN COOK
SEATTLE POST-INTELLIGENCER REPORTERS

AdwareReport Editor's Note: Spyware Cleaner is the 2nd anti-spyware product that we've reviewed to get hit with a lawsuit alleging deceptive practices. Read our review of Spyware Cleaner here.

Washington's attorney general has filed his first lawsuit under the state's new anti-spyware law -- alleging that a New York company's software claiming to rid personal computers of spyware actually deposits a nefarious program instead.

The suit, which was filed Tuesday against Secure Computer LLC of White Plains, N.Y., alleges that the company's spyware-scanning software falsely labels ordinary Windows system keys as spyware to induce computer users to pay $49.95 for the company's Spyware Cleaner program. That program doesn't actually clean spyware from the PC but rather modifies the computer's security settings, the suit alleges.

Attorney General Rob McKenna is expected to announce the suit at a news conference today in Seattle along with Nancy Anderson, deputy general counsel from Microsoft Corp., which also has filed suit against Secure Computer.

"This lawsuit is intended to send a message to spyware perpetrators and to hucksters who market phony products that play on the public fear of spyware," McKenna said Tuesday night. He called the alleged tactics, especially the changing of security settings, "quite startling."

Microsoft's lawsuit was prompted in part by complaints from the company's customers, Anderson said. At the same time, online promotions for the Spyware Cleaner program allegedly capitalized on the company's name, with phrases such as "Microsoft spyware cleaner" and "Microsoft anti-spyware."

Anderson described the case as an "important milestone in making sure consumers understand that they will be protected if they are preyed upon by deceptive practices." Microsoft previously cited the state's anti-spyware law in a separate lawsuit against an unnamed defendant.

The law, which was enacted last year, made it illegal to illicitly install software on someone else's computer to modify settings, collect information or perform other deceptive acts.

Both suits also make claims under anti-spam laws, alleging deceptive practices in e-mails used to promote the product. McKenna's suit names defendants including Paul E. Burke, Secure Computer's president, who didn't return a message left on his phone in New York.

The suit alleges that Secure Computer, Burke and another defendant, Gary T. Preston of Jamaica, N.Y., made more than $100,000 by selling Spyware Cleaner through a network of affiliates. The suit, which also names some of those affiliates, asks the court to enjoin the defendants from deceptive practices and assess financial penalties.

Ben Edelman, an expert who has testified in anti-spyware suits, said he was familiar with Secure Computer and its tactics. He described it as "a deplorable practice" that "takes advantage of users in their moment of weakness." Edelman said there are other companies engaged in similar practices.

According to the attorney general's suit, the defendants marketed the Spyware Cleaner product to computer users through pop-up advertisements and e-mails that told them their machines had been infected with spyware. The pop-up messages, which mimicked the appearance of Microsoft security boxes and used the Redmond company's trademarked font, then asked users to perform a computer scan.

The messages were designed to alarm computer users, with one reading: "Warning -- Your computer may be infected with harmful spyware programs," the suit says. Those consumers who followed through with the scan were then told that they had spyware on their computers.

"Deceived into believing that dangerous spyware is on their computer and there is no time to waste, the user is induced to purchase Spyware Cleaner," the suit says.