Yesterday, the Federal Trade Commission (“FTC”) announced that a temporary restraining order had been issued by a court of law against five related tech support companies and their respective principals (the “Defendants”), that allegedly had engaged in a campaign of deceptive pop-up marketing. Specifically, the FTC contends that dating back to 2013, the Defendants had used pop-up advertisements that “warn” consumers that their computers have been “hacked, infected, or otherwise compromised” in an effort to sell Defendants’ tech support services. Although represented by counsel, the Defendants have yet to respond to the FTC’s complaint.
What Pop-Up Advertisements Led to a Charge of Deceptive Marketing?
FTC Brings Deceptive Pop-Up Marketing Claim Against Tech Support Companies
According to the complaint filed by the FTC, in marketing their respective products, the Defendants employed a tactic known as “browser hijacking.” This practice involves tech companies (and their affiliates) using pop-up advertisements to deceive consumers into believing that their computers have been infected by viruses when, in fact, they have not. Consumers are instructed by the subject advertisements to call a toll-free number to have the viruses removed. Upon calling the telephone number listed in the pop-up, consumers are told by Defendants’ telemarketers that they are speaking with representatives of Microsoft or Apple, when this is not in fact the case. The telemarketers allegedly claim that there is something wrong with the consumers’ computers and that only the Defendants’ software is capable of remedying the issue. During the calls, the telemarketers claim that they are running a test on the applicable consumer’s computer. However, the FTC alleges that no such tests actually take place. In the end, if the telemarketers are successful with their pitch, “Defendants charge consumers approximately $200 for a ‘one-time fix’ of the purported problem, or approximately $400 for a one-year technical support plan.”
The FTC has already obtained a temporary restraining order against the Defendants, which: 1) prohibits the Defendants from continuing to engage in such deceptive pop-up marketing; and 2) freezes their assets.
Earlier this year, we blogged about the FTC’s aggressive initiative to “crack down” on deceptive marketing campaigns. With the prospect of significant regulatory and legal liability at stake, it is more important than ever to speak with an experienced attorney before launching any marketing campaign.