Feeds

'Spamford' Wallace fined $4m over spyware biz

FTC cracks down on rogue operations

Protecting against web application threats using SSL

Sanford 'Spamford' Wallace has been fined $4m and ordered to restrict the deceptive spyware practices of his company, Smartbot.Net, after losing a lawsuit brought by the US Federal Trade Commission.

The FTC alleged that Wallace's software takes advantage of well-known IE vulnerabilities to infiltrate PC and secretly change user's settings and hijack their search engines, before serving up a barrage of pop-up ads. The ads try to bully users into buying anti-spyware products, Spy Wiper or Spy Deleter, for $30 a throw. Worse still, the products fail to clean up systems, the FTC says.

A default judgment against Wallace and Smartbot.Net orders them to give up $4m of their ill-gotten gains. The order also bars Wallace and Smartbot.Net from downloading spyware onto consumers' computers or distributing software that changes users PC settings without their consent. Jared Lansky, an ad broker who disseminated ads containing Wallace’s spyware via OptinTrade, was fined $227,000 in the same judgement.

The case against Wallace represents the first federal prosecution of a spyware case, although individual states such as Utah have targeted alleged spyware operations. Wallace claims he is being targeted because of his past as a notorious bulk mailer. His firm Cyber Promotions sent millions of spam emails a day before lawsuits from AOL and Compuserve prompted Wallace to leave the company and "abandon spamming".

In a second case, the FTC obtained a revised court injunction against Odysseus Marketing and its principal, Walter Rines, over their alleged spyware downloads. Odysseus Marketing alleged tricked users into downloading a software bundle containing spyware components via promises that it would allow consumers to engage in anonymous peer-to-peer file sharing. According to the FTC, the spyware package actually hijacked search engines and reformatted search engine results, placing Rines’ clients first.

The FTC recently amended its complaint, charging that the defendants exploit security vulnerabilities to distribute spyware that captured consumers’ personal information. this data - including their names, addresses, email addresses, telephone numbers, internet browsing and shopping history - was allegedly uploaded onto the net from compromised machines and sold by Odysseus. The revised injunction bans the defendants from downloading spyware without consumers’ consent, and from disclosing, using, or further obtaining consumers’ personal information, pending trial. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Infosec geniuses hack a Canon PRINTER and install DOOM
Internet of Stuff securo-cockups strike yet again
'Speargun' program is fantasy, says cable operator
We just might notice if you cut our cables
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
YouTube, Amazon and Yahoo! caught in malvertising mess
Cisco says 'Kyle and Stan' attack is spreading through compromised ad networks
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
Greater dev access to iOS 8 will put us AT RISK from HACKERS
Knocking holes in Apple's walled garden could backfire, says securo-chap
Microsoft to patch ASP.NET mess even if you don't
We know what's good for you, because we made the mess says Redmond
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.