Fraudsters Agree to Pay $26M to Settle FTC Allegations of Phony Tech Support Scheme
Two Cyprus-based entities, Restoro and Reimage, operating as a “common enterprise,” agreed to pay the FTC $26 million to resolve allegations they ran a phony computer tech support scheme since January 2018 that bilked tens of millions of dollars from consumers, in violation of the FTC Act and the commission’s Telemarketing Sales Rule, said their proposed stipulated order Thursday (docket 1:24-cv-00735) in U.S. District Court for the District of Columbia.
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Restoro and Reimage have been using false and unsubstantiated claims about the performance and security of consumers’ computers in the marketing of their purported computer security and repair services, said the FTC’s complaint. Their methods have included “deceptive pop-ups,” internet marketing, scans for purported computer errors and risks and telemarketing, it said.
The pop-ups and internet ads lure consumers with an offer of a free scan or of an update to consumers’ computers, said the complaint. Regardless of the computers’ actual health, the scan or update “inevitably finds purported performance or security issues requiring repairs,” it said.
The pop-ups that Restoro and Reimage use contain system warnings and threats “to scare consumers into believing that their computers suffer from performance or security issues requiring immediate attention,” said the complaint. The pop-ups “appear unsolicited when consumers are using the internet,” it said.
The pop-ups warn consumers that their computers are damaged or infected by viruses, and direct them to scan or update their computers or operating systems within a few minutes to avoid harm, said the complaint. On numerous occasions, the pop-ups “impermissibly" bore the Microsoft Windows logo, it said. The warnings and claims in the pop-ups are “false, misleading, or unsubstantiated,” it said.
Restoro and Reimage don’t know what performance or security issues, if any, the consumers’ computers have when the pop-ups appear on consumers’ screens, said the complaint The pop-ups invite consumers to click on a button to initiate a scan or an update, it said. Restoro and Reimage also use internet advertising to lure consumers to their phony tech support services, it said. The advertising offers a free scan and diagnosis that purports to restore and repair Windows systems in two minutes, it said. Clicking on the link leads to a scan of the computer, it said.
FTC investigators made four undercover purchases of the defendants’ services between May and August 2022 to “replicate” consumers’ experience with the phony scheme, said the complaint. The computer they used for the purchases was free of performance and security issues, and it also had an antivirus program installed, it said.
The defendants’ method of operation “was the same in all of the purchases,” said the complaint. A scan showed numerous purported problems and security concerns, followed by an “invitation” to buy software to repair the alleged issues, it said. Once the investigators purchased the software, they received a number to call to activate the software every time, it said. When the investigators called that number, the defendants’ telemarketers “made false performance and safety claims about the computer used by the investigators,” it said. They then attempted to sell the investigators repair services by a purported technician during each of the undercover purchases, it said.