By Jonathan Stempel
(Reuters) - Two companies that claimed they could help rid computers of viruses and malware agreed to pay $26 million to settle U.S. Federal Trade Commission charges they duped consumers, particularly older adults, into buying repair services they did not need.
The FTC said on Thursday that Restoro and Reimage, both based in Nicosia, Cyprus, since January 2018 used fake Microsoft (NASDAQ:MSFT) Windows pop-up ads to scare people into scanning their computers "to avoid more damage" from hackings, and later pay $27 to $58 for software to "fix" the problems.
After consumers called a phone number to "activate" their software, Restoro and Reimage telemarketers accessed their computers and tried to "upsell" them into buying services done by technicians, costing hundreds of dollars more, the FTC said.
Typical pop-ups included statements such as "System warning! Your Windows system is damaged" and "System damage: 28.1%--Immediate removal required!", and warnings of permanent damage within a few minutes unless action was taken.
"These companies used scare tactics and lies about threats to consumers' personal computers to bilk consumers," said Samuel Levine, director of the FTC consumer protection bureau.
Without admitting or denying wrongdoing, Restoro and Reimage also agreed not to misrepresent their detection of viruses and malware, and not to engage in deceptive telemarketing.
The FTC plans to use the $26 million to provide restitution to consumers.
John Villafranco, a lawyer for Restoro and Reimage, in an email said the companies ceased sales last year, and despite disagreeing with the FTC's allegations settled "in the interest of resolving this matter without having to litigate."