In their latest collaboration, the Federal Trade Commission and the Florida Attorney General reached a deal with the lead generators involved in a “massive” tech scam.
The regulators filed suit in November 2014 against defendants, Cashier Myricks and corporate entities PC Cleaner Inc., Netcom3 Global Inc., and Netcom3 Inc., alleging they offered “free trial” software that claimed to improve the security or performance of users’ computers.
But once downloaded, the software always reported problems, even when no real problems existed, that could only be cured by buying a paid version of the software ranging from $29 to $49, the FTC and Florida AG said. To “activate” the software, consumers were required to call a number that connected them with telemarketers who used high-pressure sales tactics to pitch additional unnecessary computer support services costing hundreds of dollars.
The FTC and Florida AG charged the defendants with violations of Section 5 of the Federal Trade Commission Act as well as the Florida Deceptive and Unfair Trade Practices Act.
Myricks and his related corporate defendants elected to settle, agreeing to pay $258,000 (of a suspended $29 million judgment). The stipulated consent order also prohibits the defendants from deceiving consumers when selling goods and services and requires them to perform due diligence on businesses before they generate and sell leads in the future to ensure that the companies are not misleading consumers or violating either the FTC Act or the FDUTPA.
To read the complaint and the stipulated final order in FTC v. Inbound Call Experts, click here.
Why it matters: Tech scams have been a particular target for the FTC recently, as evidenced by a deal a technology company reached with the agency after being charged with replacing a Web browser game with a program that installed apps on mobile devices without permission and a complaint filed in June by the FTC and Florida AG against defendants who allegedly deceived consumers with bogus computer scans and false claims of malware.