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Thursday, October 4, 2012

Indian call centre disgrace: scareware scammers trick Americans

New York: US officials said on Wednesday that they had shut down six “scareware” scammers, mostly operating from call centres in India. They tricked over a million Americans into thinking their computers were infected with viruses and scared them into buying software to “fix” their non-existent problems.

America’s Federal Trade Commission (FTC) worked with its counterparts in Canada and Australia to identify and track the crooked call centres that were located around the world, but were largely concentrated in India. Microsoft also played a part in identifying the scammers.

The scammers stayed under the radar by using virtual offices, more than 80 different domain names and 130 different phone numbers. The agency said many of the scammers from India were using US carriers, and the carriers agreed to block the numbers. This is one of the most widespread Internet scams of the decade and has duped people out of millions of dollars.

The FTC told Firstpost that it is working with Indian agencies, but did not disclose confidential details as it said it could not talk about ongoing investigations.


 

“In these outrageous and disturbing cons you get a call from someone pretending to be from a major computer company who dupes you into thinking you have a virus on your computer,” FTC chairman Jon Leibowitz told a press conference, which also played an audio tape of one of the calls.

“At one level, it’s like a bad Bollywood movie, but at another level it’s a rip-off of consumers,” he added.

The FTC has filed charges against six so-called tech support companies for running the “scareware” scheme on tens of thousands of victims. A US District Court judge, at the agency’s request, ordered a stop to the scam.

According to Bloomberg, the court froze $180,000 in assets belonging to the six companies involved in the scam. It has also taken measures to block phone lines and websites the companies used to contact customers.

The companies in the dock are: Pecon Software Ltd., Lakshmi Infosoul Services Pvt. Ltd., Finmaestros LLC, Zeal IT Solutions Pvt. Ltd., Virtual PC Solutions and PCCare247, Inc.

Leibowitz said the frozen assets could be distributed to victims once they are identified, but he warned it’s rare to “get 100 percent back in restitution.”

The orders against the companies, most of them based in India, came a day after the final defendant in another scareware case dating back to 2008 was ordered to pay $163 million in restitution.

Decoding the “scareware” scam

The duplicity worked simply: Call centre workers pretending to be affiliated with Dell, Microsoft, McAfee, Norton or Microsoft cold-called Americans about supposed computer problems and said they had detected malware on their systems.

They directed unsuspecting computer users to a Microsoft Windows menu, and scared them by telling them that standard warning messages displayed there indicated malicious programs were already on their machines.

People were then convinced to grant the callers remote access to their computer. When the victim paid, the scammers delivered useless, free or even malicious software. Often, they also used the victim’s credit card number for further fraud.

The groups also used online ads to present deceptive websites that peddled scareware to unsuspecting Internet users. They sold “fixes” at prices ranging from $49 to $450.

“These so-called tech support scams are the latest variation of scareware,” said Leibowitz. “They have taken scareware to a whole other level of virtual mayhem. Today’s announcement is a wake-up call to computer users around the globe.”

Canada’s top telecom regulatory official, Andrea Rosen of the Canadian Radio-Television and Telecommunications Commission, said two related enforcement actions were filed in Canada.

“We make a difference by working together,” said Rosen, while highlighting how the agencies and regulators collaborated across borders to investigate and quash the massive scareware scam.
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