FTC gets $163M judgment in scareware case

WASHINGTON -- A federal court imposed a judgment of more than $163 million on a woman accused of using computer "scareware" to trick consumers into thinking their computers were infected with viruses and then selling them software to fix the non-existent problem, the Federal Trade Commission said Tuesday.

The court order also bars the defendant, Kristy Ross, from selling computer security software and any other software that interferes with consumers' computer use, and from any form of deceptive marketing, the FTC said.

The judgment stems from charges that were originally filed by the FTC in 2008 against Ross and six other defendants. The FTC claimed that the seven people conned more than 1 million consumers into buying software to remove malware supposedly detected by computer scans.

According to the FTC, the operation used Internet ads placed with advertising networks and several popular commercial websites. The ads displayed to consumers a "system scan" that invariably detected a host of malicious or otherwise dangerous files and programs on consumers' computers. The fake scans would then urge consumers to buy the defendants' software for $40 to $60 in order to get rid of the malware.

The U.S. District Court for the District of Maryland ordered a halt to the scheme until the legal issues were settled. The FTC said it eventually settled with, or obtained default judgments against, the other defendants in the case.