Court shuts down 2 alleged tech-support scammers

A federal court order has temporarily shut down two massive telemarketing companies that have allegedly bilked consumers out of more than $120 million in deceptive computer tech support.

The Federal Trade Commission and the state of Florida filed the complaints with the U.S. District Court for the Southern District of Florida, charging that over the last two years the companies sold bogus software and unneeded tech support to consumers over the telephone.

One company, which operated under names including Vast Tech Support and OMG Tech Help, had among its defendants Elliot Loewenstern, a former partner of Jordan Belfort, whose autobiographical book The Wolf of Wall Street led to the Martin Scorsese-directed film released last year.

The other company, the larger of the two at 800 employees, did business under names including Inbound Call Experts, sold software that included PC Cleaner.

The FTC charges that the scams led consumers, through bogus ads and popup notices, to download software that scans their computers and finds errors, whether the consumer's PC has any or not. Consumers are then told they need to purchase a full version of the software, priced at $29-$49, and call a toll-free number to activate it.

Instead, the agency alleges, that number is manned by telemarketers who convince the callers to give them remote access to their PCs. Ensuing sales pitches of security and tech support software resulted in costs of as much as $500.

As part of the agency's investigation it contacted one of the firms using "a pristine, out-of-the-box computer" and the defendant found 8,000 errors as part of the scheme, said Colleen Robbins, the FTC's chief of online threat initiatives.

The remote access diagnostic scans done by the scammers "inevitably shows (consumers) that they have lots of errors and problems and they need to spend hundreds of dollars," Robbins says, on tech support and additional antivirus software.

"These operations prey on consumers' lack of technical knowledge with deceptive pitches and high-pressure tactics to sell useless software and services to the tune of millions of dollars," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "There's no excuse for it, and we are pleased the court has taken steps to temporarily shut down these scams while our lawsuit proceeds."