FTC Orders Spyware Operator To Pay $4 Million

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Federal Trade Comission ordered Sanford Wallace to pay back more than $4 million that he made by selling a anti-spyware software that fixes imaginary problems. Wallace and his SmartBOT company were selling two purported anti-spyware programs Spy Wiper and Spy Deleter.

According to FTC, Sanford Wallace exploited an Internet Explorer vulnerability, making users to believe that their computers are infected. The real spyware included a small program that opened the CD-ROM tray and displayed the message "If your cd-rom drive�s open . . .You DESPERATELY NEED to rid your system of spyware pop-ups IMMEDIATELY! Spyware programmers can control your computer hardware if you failed to protect your computer right at this moment! Download Spy Wiper NOW!�

The Spy Wiper and Spy Deleter were sold for $30. FTC accused Wallace for spyware operations in 2004.

The order, issued by the U.S. District Court in New Hampshire, also bars Wallace and his company from:

-- Downloading spyware and any software onto consumersďż˝ computers without consent;

-- Redirecting consumers' computers to sites or servers other than those the consumers selected to visit;

-- Changing any Web browser�s default home page. A settlement with defendants OptinTrade and Jared Lansky prohibits the same practices. Lansky, an ad broker who distributed ads containing Wallace's spyware, will give up $227,000 in spyware-related profits.

In the 1990s Wallace was known as "Spamford" or "Spam King" because he headed a company, Cyber Promotions, that sent as many as 30 million junk e-mails daily to consumers.