Feeds

'Spamford' Wallace fined $4m over spyware biz

FTC cracks down on rogue operations

The Essential Guide to IT Transformation

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. ®

Build a business case: developing custom apps

More from The Register

next story
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
'Things' on the Internet-of-things have 25 vulnerabilities apiece
Leaking sprinklers, overheated thermostats and picked locks all online
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Tor attack nodes RIPPED MASKS off users for 6 MONTHS
Traffic confirmation attack bared users' privates - but to whom?
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.