Scareware – How Crime Pays

February 15, 2011

Scareware is fraudulent software that uses deceptive advertising to trick users into believing they’re infected with some variety of malware, then convinces them to pay money to protect themselves.  The infection isn’t real, and the software they buy is fake, too.  It’s all a scam.

One scareware operator sold “more than 1 million software products” at “$39.95 or more,” and now has to pay $8.2 million to settle a Federal Trade Commission complaint.

Seems to me that $40 per customer, minus $8.20 to pay off the FTC, is still a pretty good revenue model.  Their operating costs can’t be very high, since the software doesn’t actually do anything.  Yes, a court ordered them to close down their business, but certainly there are other creative entrepreneurs that can recognize a business opportunity when they see it.

Source: Bruce Schneier

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