Regulators from five countries joined together in an operation to crack down on a series of companies they say orchestrated one of the most widespread Internet scams of the decade.
The U.S. Federal Trade Commission (FTC) and other international regulatory authorities today said they shut down a global criminal network that allegedly bilked tens of thousands of consumers by pretending to be tech support providers.
FTC Chairman Jon Leibowitz, speaking during a press conference with a Microsoft executive and regulators from Australia and Canada, said 14 companies and 17 individuals were targeted in the investigation. In the course of the crackdown, U.S. authorities already have frozen $188,000 in assets, but Leibowitz said that would increase over time thanks to international efforts.
"These so-called tech support scams are the latest variation of scareware," Leibowitz said.
English-speaking consumers in the United States, Canada, Australia, Ireland, New Zealand, and the U.K. were targeted in the global scam, regulators said. Most of the scammers were based in India, but some also came from the U.S. and U.K.
The scam involved cold callers who claimed to work for major technology companies, such as Microsoft or Google, and who told consumers they had viruses on their PCs, according to regulators. The callers would attempt to dupe users into giving them remote access to their computers, locking the user out while attempting to "fix" the malware that the scammer claimed was on the machine.
In some cases, ads were placed on Google to lure unwitting consumers when they searched for their PC's tech support phone number. And many of the people called were on do-not-call registries.
Windows PC users were targeted seemingly indiscriminately and charged between $49 to $450 to remove the non-existent malware that the supposed tech company representative claimed was on the PC.
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 FTC said that more importantly, it should be able to stop the scams going forward.
It is thought there could be upwards of tens of thousands of victims worldwide in total across six countries, and the FTC warned that the figure could be "significantly higher."
The alleged scammers attempted to avoid detection by using virtual offices, including more than 80 different domain names and 130 different phone numbers. Officials said many of the scammers from India were using U.S. carriers, and the carriers agreed to block the numbers.
A U.S. District Court judge, at the request of the FTC, ordered a stop to six alleged tech-support scams pending further hearings. A further 17 individual defendants were also targeted by the FTC in six legal filings with the U.S. District Court for the Southern District of New York.
The FTC charged the suspects under the Federal Trade Commission Act, which bars unfair and deceptive commercial practices, and were also charged with illegally calling numbers on the Do Not Call Registry.
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More than 10,000 complaints were drawn from Australian citizens to the country's regulator as early as 2009. Once the scam began to spread around the world, the Australia Communication and Media Authority contacted U.S. authorities, which had by then received 2,400 complaints, with intelligence on the alleged scammers. The FTC said "hundreds of thousands of U.S. consumers" could have been affected.
Canada had also received "thousands and thousands" of complaints, but Andrea Rosen, chief compliance and enforcement officer at the Canadian Radio-Television and Telecommunications Commission (CRTC), said it was difficult to identify exactly how many. In Australia, it was estimated that the scammers made about $85 from each successful scam.
The FTC is working with the Indian authorities, but did not disclose confidential details due to the ongoing investigations.
Leibowitz thanked U.K.'s Serious Organised Crime Agency and the CRTC for their "invaluable assistance" to the FTC.
Canada's Rosen said "we make a difference by working together," highlighting how the agencies and regulators collaborated across borders to investigate the scams.
The FTC also acknowledged investigative assistance it received from Microsoft, as well as from other technology companies.
Frank Torres, Microsoft's director of consumer affairs and senior policy counsel, said at the press conference that Microsoft will continue to work with the agencies as other scams emerge. He noted that Microsoft will never cold-call customers and ask for their credit cards to charge them for services they don't need.
"It's like playing a game of Whac-A-Mole, really, for cybercriminals to find ways to deceive people," Torres said.