The Federal Trade Commission (“FTC”) and Florida have settled charges against Vast Tech Support LLC, OMG Tech Help, their founder and COO Mark Donohue, and related companies regarding claims of deceptive marketing of computer software and tech support services. The settlement continues the FTC’s trend of enforcement actions that target scammers who scare consumers into buying expensive and unnecessary computer repairs and tech support services.
The settlement prohibits Vast Tech, OMG Tech Help, and Donohue from misleading consumers regarding the nature of products they sell or market and prohibits deceptive telemarketing. The settlement also prevents Vast Tech and OMG Tech Help from advertising, promoting, or selling tech support products and services.
The FTC filed the case, pending in the United States District Court for the Southern District of Florida, in 2014 as part of a group of actions against Florida-based tech support scammers. The FTC claims the parties violated the Telemarketing Sales Rule, the FTC Act, and the Florida’s Deceptive and Unfair Trade Practices Act.
In the schemes, the companies used software to trick consumers into believing they were having problems associated with their computers. The scammers then directed consumers to telemarketers who employed high pressure sales tactics to convince consumers to buy costly tech support services. The scammers claimed the free software program PC HealthBoost would improve computer speed and protect against errors and crashes. Instead, the program falsified reports that tricked consumers into believing hundreds or thousands of errors existed on their computers that needed fixing. Co-defendant Boost Software encouraged consumers to pay almost $30 for a registered version of PC HealthBoost to fix phantom software problems. In order to activate the registered version, consumers called Vast Tech’s call center, which was operated by OMG Tech Help. During the calls, operators obtained access to consumers’ computers and ran more false diagnostic tests. The results from the false tests “scared consumers into spending hundreds of dollars on unnecessary computer repairs,” officials said.
In the settlement, Vast Tech and OMG Tech Help agreed to the entry of judgment against them for over $27 million and agreed to surrender their assets to a court-appointed receiver, who will liquidate the companies. Vast Tech COO Mark Donohue consented to entry of judgment individually for more than $9 million. The settlements also impose compliance monitoring and reporting requirements.
The settlement comes less than one month after the FTC added three new defendants and new charges in a tech support scam case pending in the United States District Court for the Eastern District of Pennsylvania and continues the trend in litigation and enforcement actions, which began in 2011, targeting companies that allegedly operate scams to sell tech support services. The settlements and litigation, coupled with the FTC’s April 2016 consumer alert, demonstrate the FTC’s commitment to working with State Attorneys General to combat scams designed to defraud consumers and take advantage of consumers’ insecurities regarding their technology needs and uses.