Washington State Pursues 'scareware' Distributors

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The Washington state attorney general's office has sued a Texas man for sending "scareware" and is asking the court to require him to stop his activities and pay restitution to people who fell for his alleged scam.

The lawsuit charges James McCreary with sending pop-ups that look like system warnings, telling recipients that their computers have critical errors and offering them a software download that can fix the problems. Victims paid US$40 to download the RegistryCleanerXP software to correct the errors.

However, consumers didn't necessarily have problems with their computers, and the software didn't do anything for them.

The scam "primarily" affected people who hadn't downloaded Windows XP's SP2 update, said Richard Boskovich, senior attorney at Microsoft's Internet safety enforcement team, at a news conference on Monday.

That's because before SP2, Windows XP had the Windows Messenger Service feature, a tool typically used by network administrators to send messages to computer users. McCreary used the Net Send feature of Windows Messenger Service, which is different from

Microsoft's instant messenger program, to deliver the pop-ups to end-users. SP2 removed the Windows Messenger Service feature from Windows XP for consumers. "It didn't make sense to have that for people at home because they didn't have a network administrator," Boskovich said. Microsoft worked with the attorney general's office to help pursue the case.

While the software that consumers downloaded didn't do anything detrimental to their computers, Microsoft said it was concerned about the possibility of McCreary abusing information collected from victims who bought the software, such as their credit card information. "In the best-case scenario, they're out $40," Boskovich said about the effect of the scam on people.

Some victims may have decided to buy the software just to stop the system messages from appearing on their computers. According to the suit, one computer in a lab received 214 warning messages in a 24-hour period from McCreary's company, with some messages appearing as often as one minute apart. A user would have to close each one individually, according to the suit. "Most consumers do not know how to stop the incessant messages and for a period of time in which the messages are being sent, are limited in their ability to effectively use their computers," the suit reads.

The attorney general's suit asks the court for $2,000 per violation as a civil penalty, appropriate restitution for victims and recovery for damages for each violation. The attorney general's office could not estimate how many people might have fallen for the scam, but the suit could result in fines of hundreds of thousands -- if not millions -- of dollars, said Paula Selis, an attorney who leads the attorney general's consumer protection high-tech unit.

McCreary could not be reached on a phone number listed on the Web site for the RegistryCleanerXP software. The site appears to be operational, offering visitors a "free scan." The scan, according to Selis, always turns up 43 critical errors before offering visitors the $40 software download.

The state was able to file this suit because Washington has one of the toughest antispyware laws in the country, said Rob McKenna, Washington's attorney general. The law was recently expanded to allow the authorities to pursue not just people who push spyware onto computers but also those who "prey on consumers' anxieties," tricking them into buying software, McKenna said.

The state has so far filed seven lawsuits under the expanded legislation, he said.

Microsoft has filed seven cases against people distributing "scareware," including one in Florida and another in Delaware. The other five are filed against "John Does," meaning that Microsoft has yet to identify the people responsible for the scams.

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