Office Depot pays FTC $25 million for allegedly using fake malware scans and charging...

[midian182]

What just happened? Office Depot and its software supplier, Support.com, have agreed to pay a total of $35 million for allegedly using fake malware scans that convinced customers to pay for repair services.

The settlement is part of a lawsuit brought by the Federal Trade Commission (FTC), which claimed both companies and Office Depot subsidiary OfficeMax used a tool called PC Health Check Program to show customers that malware infections had been discovered on a computer when no such problems were present.

The FTC alleges that the software’s results were entirely dependent on whether a customer answered yes to any of the four questions they were asked at the beginning of the program. These included questions about whether the computer ran slow, received virus warnings, crashed often, or displayed pop-up ads. Clicking on ‘yes’ to any of these would result in the scan finding malware. PC Health Check Program also recommended customers purchase repair services, which could exceed $300, to address the problem.

A whistleblower first exposed the alleged misdeeds to Seattle TV station KIRO-TV back in 2016.

“One OfficeMax employee complained to corporate management in 2012, saying 'I cannot justify lying to a customer or being TRICKED into lying to them for our store to make a few extra dollars'," says the FTC press release.

The companies allegedly used the software from 2009 until November 2016. As part of the settlement, Office Depot has agreed to pay $25 million and Support.com will pay $10 million to the FTC. The agency intends to use the money to refund affected customers.

“Consumers have a hard enough time protecting their computers from malware, viruses, and other threats,” said FTC Chairman Joe Simons. “This case should send a strong message to companies that they will face stiff consequences if they use deception to trick consumers into buying costly services they may not need.”

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https://www.techspot.com/news/79402-office-depot-pays-ftc-25-million-allegedly-using.html

 

[Uncle Al]

Unfortunately it didn't include conviction and jail time for those that created and managed this scam. THAT would have sent a much stronger signal to the public and put away those that are just basic scam artists ....

 

[Cycloid Torus]

A scam like this IS a felony.....right?

 

[stewi0001]

A scam like this IS a felony.....right?

Who knows. Based on the robo phone call shutdowns, people are just getting slapped on the wrist with fines: https://www.techspot.com/news/79390-ftc-shuts-down-four-robocall-companies-multimillion-dollar.html

I wouldn't be surprised if Geek Squad is or was doing similar practices.

 

[treetops]

Unfortunately it didn't include conviction and jail time for those that created and managed this scam. THAT would have sent a much stronger signal to the public and put away those that are just basic scam artists ....

Steal a 1$ candy bar and get your face slammed on the concrete. Some CEO probably made the call....

 

[RickRick]

When will they be forced to refund all the $$$ they made from the scam?

 

[psycros]

They should have to pay 200% of what they charged for these services, with all affected customers getting 150% of their money back and the remainder going into the FTCs budget. Criminals should be funding law enforcement. Also, there needs to be jail time involved for whoever greenlighted this fraud.

 

[Theinsanegamer]

And now I can use the fact they were found guilty to give people a reason to pay me to fix their computers rather then pay out the butt for these overpriced malware scanners.

 

[captaincranky]

They should have to pay 200% of what they charged for these services, with all affected customers getting 150% of their money back and the remainder going into the FTCs budget. Criminals should be funding law enforcement. Also, there needs to be jail time involved for whoever greenlighted this fraud.

I'll give you a "10" on the moral outrage content of your post.

The truth of the matter is though, these types of brick and mortar "stationary stores" are closing at an alarming rate. Ostensibly, or perhaps naively on my part "hopefully", this is something they resorted to while trying to keep themselves afloat. https://www.businessinsider.com/death-of-office-supply-stores-2013-2

Which obviously doesn't make anywhere near right.

Or the CEO and BoD are padding their retirement / severance nest eggs, at public expense. Who knows?

The federal court system doesn't allow fining people above their ability to pay. Not to mention there are 54 separate title codes to work from. Title 18, the criminal code, IIRC, generally doesn't provide for fines above $250.000 (I haven't read it cover to cover though. A fact check maybe)?

Here's the listing of US code Titles: https://en.wikipedia.org/wiki/United_States_Code

Should be a fun read!

 

[brucek]

Criminals should be funding law enforcement.

Totally agree that this sounds like straight up criminal fraud and should be prosecuted as such.

As to the specific point of allowing law enforcement to fund themselves via seizures and fines, there are jurisdictions where it is allowed, but perhaps it shouldn't be surprising that it comes with its own set of problems. Particularly as regards to seizures, which in some cases not only do not require conviction in court, do not even require being charged in court at all. But I'll leave all that for a future TechSpot article...

 

[Paul Deemer]

Wow what a Scam! They should have had each customer rewarded with their money back for any services the paid for. $25 million fine wasn't enough!

 

[tacobravo]

I used to work at Office Depot for over 3 years and I can attest to this. There has been numerous times where the program would throw up red flags when there wasn't any. I was quick to find out that the software was useless and a lot of employees preyed on customers using this software even though I had told them and management the program is useless. I did my best to keep the store I was working at honest. No one should spend $180 to fix nonexistent problems.

Also, support.com and the employees there are 100% useless and they don't know what they are doing.

 

[pcnthuziast]

I recall Office Depot being absolute trash. That was 15 years ago and apparently nothing has changed.

 

[sac39507]

But I don't get how they could have pulled this off. If customers said their computers were slow due to malware and they actually were, then how could the fake scans resolve the issue and leave the customers satisfied without them noticing their machines to continue to be slow? I know not all people are technically savvy and are quite naive to believe anything but not all people are.

 

[Athlonite]

“This case should send a strong message to companies that they will face stiff consequences if they use deception to trick consumers into buying costly services they may not need.” So when are they going to be doing the same thing to Apple and their BS regarding repairs trying to talk customers into thinking they need thousands of dollars in repairs when in actual fact they don't, also their use of colour change dots for water damage indicators that apparently change colour in a humid environment which they'll then say is liquid damage and wont honor their warranty