FTC Obtains Order Barring Pop-up Spam Scam, Urges Consumers to Take Steps to Protect Themselves

Ads Tout Software to Stop Annoying Pop-Ups Like The Ones Theyre Sending; Defendants Allegedly Exploited Microsoft Windows Messenger Service to Contact Consumers

For Release

At the Federal Trade Commission’s request, a U.S. district court has issued a temporary restraining order against an operation that barraged numerous consumers’ computers with repeated Windows Messenger Service pop up ads – most of which advertised software that would block future pop-ups. The defendants repeatedly sent messages to consumers – as frequently as every 10 minutes – instructing consumers to visit Web sites that state that the barrage of pop ups could be stopped by purchasing software at a cost of $25 to $30. By using the Windows Messenger Service, the defendants caused their pop ups to appear on consumers’ computer screens even when consumers were not browsing the Internet. According to the FTC, consumers can stop the pop-ups by changing the default setting on their Windows operating system.

“This is nothing more than a high-tech version of a classic scam,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “The defendants created the problem that they proposed to solve – for a fee. Their pop-up spam wasted computer users’ time and caused them needless frustration.”

The Defendants’ Business Practices

The complaint announced today was filed against the following defendants, all of whom are based in San Diego, California: D Squared Solutions, LLC (D Squared); and Anish Dhingra and Jeffrey Davis, both individually and as officers of D Squared.

The Commission contends that the defendants effectively co-opted a network administration feature of Microsoft Windows known as Messenger Service, a component designed to provide network administrators with the ability to provide instant information to users. An example of such a message is the one that can be provided to network users to let them know that a print job has been completed successfully. The Windows system comes with the Messenger Service automatically in the “on” position, but it can be over-ridden by consumers on their individual computers.

The defendants allegedly caused Messenger Service windows to pop up on consumers’ computer screens – as often as every 10 minutes – advertising software that would supposedly block future pop-up spam messages from occurring. According to the FTC, the defendants placed their pop-up ads near the center of users’ computer screens, blocking the user’s work. The ads appeared as long as the users were connected to the Internet, leading to particular trouble for users with DSL lines or cable modems who were continually on the Web. The FTC alleges that these users continued to be bombarded by the pop-ups, even when they were off of the Internet and working in other applications such as word-processing or spreadsheet programs.

Finally, the defendants allegedly either sold or licensed their pop-up-sending software to other people, allowing them to engage in the same conduct. The defendants’ Web site allegedly offered software that would allow buyers to send pop-ups to 135,000 Internet addresses per hour, along with a database of more than two billion unique addresses.

The FTC’s Complaint

According to the FTC’s complaint, the D Squared defendants have engaged in an unfair practice by interfering with consumers’ use of their computers, specifically by causing a stream of multiple, unwanted Windows Messenger Service pop-ups to appear on their computer screens, even when the consumers are not using their Internet browsers. The complaint contends the practice is unfair because it is likely to cause substantial consumer injury, including the loss of data, reduced work productivity, and the temporary freezing of the consumer’s computer screen. Further, the defendants encouraged consumers to think that they could not easily stop the barrage of pop ups. The FTC contends that these costs are not balanced by any benefits to consumers or competition.

In addition, the complaint charges the defendants with unfairly attempting to coerce consumers into buying their pop-up blocking software. The multiple, unwanted Windows Messenger Service pop-ups that appear on consumers’ computer screens serve simply to advertise the defendants’ product that is designed to stop exactly this type of pop-up.

The Commission vote to approve the complaint was 5-0. It was filed under seal in the U.S. District Court for the District of Maryland on October 30, 2003, and a temporary restraining order was granted the same day. The seal was lifted on November 5, 2003. In filing the complaint, the FTC sought and received immediately ex-parte relief to halt the defendants’ practices. The Commission also is seeking other ancillary relief as deemed necessary to protect consumers from the defendants’ allegedly unfair conduct.

Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov . The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT:

Claudia Bourne Farrell
Office of Public Affairs
202-326-2181

 

STAFF CONTACT:

Daniel R. Salsburg or Mona S. Spivack
202-326-3402 or 202-326-3795

(FTC File No. 032-3223)
(Civ. No. AMD 03 CV 3108 (D. Md.))