On July 13, the FTC filed a proposed settlement agreement in the United States District Court for the Southern District of Florida between a group of lead generators and the FTC and the Office of the Florida Attorney General.  The named lead generators included PC Cleaner, Inc.; Netcom3 Global, Inc.; Netcom 3, Inc., d/b/a Netcom3 Software Inc; and Cashier Myricks.   

The Complaint alleged that the lead generators participated in a technical support scam where they provided “free trial” versions of software purportedly designed to enhance the security or performance of personal computers to consumers online.  The Complaint further alleged that once the software was downloaded, it always identified problems with a consumer’s computer requiring the consumer to purchase the “full” paid version of the software even in the absence of any legitimate computer problem. 

According to the FTC and the Florida AG, the defendants told consumers that in order to “activate” the software, they were required to call a number that connected them to the telemarketing defendants who then would use high-pressure sales tactics to sign consumers up for unnecessary technical support subscriptions and services that sometimes were costing consumers hundreds of dollars.  

Under the terms of the settlement, the defendants are prohibited from deceiving consumers in the process of selling goods and services, and they are required to review the business practices of companies for whom they generate leads to ensure that those companies are not misleading consumers or violating the FTC Act or Florida’s Unfair and Deceptive Trade Practices Act.  

Notably, the settlement includes a monetary judgment of $29,539,628.11 which has been suspended based on the named defendants’ financial condition.  The defendants will be required to pay $258,000, including the proceeds from the sale of Bentley and Range Rover vehicles.  The settlement also requires the defendants to complete various administrative tasks related to their recordkeeping and compliance monitoring practices.  Specifically, the defendants are required to review whether a lead acceptor engages in any prohibited conduct prior to entering into a business relationship with them and again every six months.  Under the settlement, the defendants are also required to maintain records of all of their lead acceptor reviews.