Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Allegedly Deceptive Tech Support Operations Settle FTC Charges, (May 17, 2013)

By Tobias J. Gillett, J.D., LL.M.

Two operators of tech support schemes have agreed to settle FTC charges that they deceived consumers into paying for unnecessary technical support services, the FTC announced today (FTC v. Marczak, FTC File Nos. 122 3246 and X130030, Case No. 12 CIV 7192; FTC v. PCCare247 Inc., FTC File Nos. 122 3243 and X120057, Case No. 12 CIV 7189).

According to the FTC’s complaint against Mikael Marczak, his operation would cold-call consumers and falsely claim to be associated with a major computer manufacturer or computer security company, such as Dell or Microsoft. The callers would direct consumers to open an Event Viewer application on their computers and claim that apparent error messages it displayed indicated that their computers were infected with malware. In actuality, the messages did not reflect malware, and would be created during normal operation of the computer. The operation would then charge the consumers fees ranging from approximately $79 to $429 to fix the nonexistent problems. The complaint alleged that the operation violated the FTC Act and the FTC’s Telemarketing Sales Rule (TSR).

During the course of its investigation into Marczak’s operation, the FTC also allegedly discovered that Marczak was operating a debt relief telemarketing operation through his company, Conquest Audit. The FTC later amended its complaint to add additional charges against Marczak and his company related to the debt relief scheme.

Sanjay Agarwalla’s operation similarly deceived consumers into paying for unnecessary tech support services, according to the FTC’s complaint against him. Agarwalla’s operation would allegedly purchase advertisements on Google that would appear when consumers searched for the names of major computer manufacturers’ and security companies’ support services and products. The advertisements were written so as to appear affiliated with the companies. When consumers would call the telephone number included in the advertisements, the operation would claim to be affiliated with the computer or security companies and would convince consumers, through use of the Event Viewer and other means, to pay fees ranging from approximately $139 to $360 to fix nonexistent malware problems.

The FTC’s stipulated order against Marczak and Conquest Audit bans them from advertising or selling computer security, technical support, or debt relief services, or assisting others to advertise or sell them. The order also prohibits making various misrepresentations in connection with advertising and selling goods and services, bars future violations of the TSR, and proscribes use of consumer information collected by the operation. It also provides for monetary relief in the amount of S984,721, which will be conditionally stayed due to the defendants’ inability to pay, although they will surrender assets.

Similarly, the FTC’s order against Agarwalla bans him from advertising or selling computer security or technical support services, or assisting others to advertise or sell them. The order also prohibits making various misrepresentations in connection with advertising and selling goods and services and requires Agarwalla to cooperate with the FTC Counsel. The order provides for monetary relief in the amount of $3,000.

The FTC has stated that, although the orders resolve its charges against Agarwalla, Marczak, and Conquest Audit, litigation will continue against other defendant in both actions. The federal district court in New York City entered the judgments on April 24, 2013.

Companies: PCCare247 Inc.; PC Care247 Solutions Private Limited; Connexxions Infotech Inc.; ConnexxionsIT Services Private Limited; Virtual PC Solutions; First PC Solution; Direct PC Solution; Virtual IT Supports; Global Innovative Services; Conquest Audit

News: ConsumerProtection FederalTradeCommissionNews