FTC Adds Three New Defendants in Tech Support Scam Case

The Federal Trade Commission, Connecticut, and Pennsylvania have added three new defendants and new charges in a case pending in the United States District Court for the Eastern District of Pennsylvania, alleging that the defendants deceived consumers into buying unneeded tech support services. According to the amended complaint, the defendants allegedly pretended to represent Microsoft, Apple, and other major technology companies to convince consumers to pay tens of millions of dollars for phony tech support services.

In the scam, the defendants allegedly bombarded thousands of customers with telemarketing calls, computer popups, and online advertisements that appeared to be from well-known technology companies to lure consumers into calling them. The amended complaint alleges that when consumers called the defendants, they were further misled into believing their computers were riddled with viruses, malware, or security breaches, and were given a high-pressure sales pitch for unnecessary tech support services. In some cases, the alleged technical support consisted of deleting harmless files, but in other cases, “technicians” would make changes that could potentially harm the performance of the computer.

The amended complaint alleges violations of Section 5 of the FTC Act (which prohibits unfair or deceptive acts in commerce); violations of the Telemarketing Sales Rule, including deceptive telemarketing calls and credit card laundering; and state law claims for violations of the state unfair and deceptive trade practices laws. New allegations in the amended complaint include that some of the defendants engaged in credit card laundering, and that other defendants helped process credit card payments and other financial services for co-defendants whom they knew had engaged in illegal telemarketing practices.

The district court previously issued a preliminary injunction, directing the defendants to stop their deceptive and unfair practices and freezing their assets while the case progresses. The defendants have not yet filed answers to the amended complaint.

The litigation demonstrates the FTC’s continued commitment to working with states to protect consumers from false and misleading practices, especially in matters involving technology and where consumers may lack expertise and knowledge. This latest action follows similar litigation and enforcement actions from 2014 and 2011 targeting companies allegedly operating scams to sell tech support services. In April 2016, the FTC alerted consumers to another alleged tech support phone scam and offered consumers guidance on receiving and answering a tech support call.