Regulators crack down on international tech support scam

By Brendan Sasso - 10/03/12 02:15 PM ET

The Federal Trade Commission (FTC), in cooperation with foreign regulators, announced a crackdown Wednesday against an international telemarketing scam.

Officials said the scammers, based mostly in India, placed thousands of calls to consumers in English-speaking countries. The callers claimed to be from major companies, including Microsoft, Dell, McAfee and Norton, and told the consumer that they had detected malicious files on their computers.

According to the FTC, the callers then directed consumers to a utility area of their computer and falsely claimed that it showed their computer was infected. The scammers then directed the consumer to download software to fix the "problem" for prices ranging from $49 to $450.

But the software was often itself a virus that gave the scammers access to the victim's computer, the FTC said.

The exact size of the scam is unclear, but officials said that thousands of consumers in the United States, Canada, Australia, Ireland, New Zealand and the United Kingdom were cheated.

Jon Leibowitz, chairman of the FTC, said the agency froze about $188,000 in assets, shut down phone lines and seized Web domains that the scammers were using. He said he hopes that victims will be able to get some of their money back, but he said full restitution is "unlikely."

He acknowledged that the alleged scammers have not been arrested yet, but he said he believes the crackdown is "a significant step toward disrupting their operations."

He added that the FTC is in contact with Indian law enforcement agencies about further action. Officials from Australia and Canada joined the FTC at Wednesday's announcement.

"It is a wake-up call, I think, for consumers," Leibowitz said at the press conference. "They're going to read stories about this scam, and they're going to think the next time someone calls up and says, 'There is a problem in your computer.' "

Frank Torres, senior policy counsel for Microsoft, joined the government regulators at Wednesday's announcement and emphasized that Microsoft would never cold-call a customer and ask for credit card information over the phone.

"We will continue to fight cybercrime," Torres said. "These threats cannot be tackled alone. It takes the cooperation of industry, government and regulators."