The Federal Trade Commission settled with two individuals who allegedly used deceptive ads to trick consumers into thinking their computers were infected with malicious software and then sold them Winfixer, Drive Cleaner, and Antivirus XP products to fix their nonexistent problem.

The “scareware” defendants agreed to pay more than $8 million to reimburse consumers and are barred from future misrepresentations.

In its complaint, the FTC alleged that the defendants used Internet advertisements to scam consumers. The defendants informed consumers on networks and on popular Web sites that a “system scan” had discovered dangerous programs or objectionable files on their computer, such as viruses, spyware, or illegal pornography.

The scan ads also encouraged consumers to buy the defendants’ software to clean their computers for $40 to $60, and more than one million consumers purchased the defendants’ products.

In the settlement, Marc D’Souza and his father, Maurice D’Souza, agreed to pay the agency $8.2 million to reimburse consumers. Marc D’Souza, who the FTC alleged was “one of the key defendants behind the scam” also agreed to be banned from any involvement with software that interferes with consumers’ computers and making deceptive claims regarding computer security software.

To read the press release regarding FTC v. Innovative Marketing, click here.

To read the court’s final order against the D’Souzas, click here.

Why it matters: The FTC noted that the case was part of its crackdown on Internet scams. Another individual and one other company previously settled with the agency over similar claims, and the FTC obtained default judgments against three other individual defendants. Litigation against one additional individual is pending.