Washington State Attorney General Rob McKenna today announced another win in the state’s fight to protect consumers from online fraud. A King County Superior Court Judge found that Internet affiliate advertisers Securelink Networks, LLC, and NJC Softwares, LCC, and their officers violated Washington’s consumer protection and spyware laws while marketing registry-cleaner software.
“Some people say you can’t police the Internet but today’s court ruling proves we can,” McKenna said. “We’ve reached another victory in our crusade to make the Internet a safer place for consumers and a fair, competitive environment for business.”
The Attorney General’s Consumer Protection High-Tech Fraud Unit filed its suit in February 2007 against California-based defendants Securelink Networks, LLC, and owner Manuel Corona, Jr., of Brea; NJC Softwares, LCC, and company officer Rudy O. Corella, of Lake Elsinore; and FixWinReg and owner HoanVinh V. Nguyenphuoc, of Redondo Beach.
The defendants were accused of using Net Send messages and deceptive free scans to market each other’s products, including Registry Sweeper Pro, Registry Rinse, Registry Doc, Registry Cleaner 32 and Registry Cleaner Pro.
King County Superior Court Judge Glenna Hall today granted the state’s requests for summary judgment, ordering Securelink Networks and NJC Softwares and their owners to provide refunds to hundreds of Washington consumers who bought products owned or advertised by the defendants.
Additionally, the businesses will each pay $400,000 in civil penalties and $141,000 in attorneys’ fees and costs. The orders prohibit them from using Net Send messages to promote products or services, misrepresenting that a consumer’s computer is at risk, installing software without the computer user’s consent, making other misrepresentations and failing to review all advertisements for products they own.
According to court documents, the defendants advertised their products by sending Net Send messages to computers running Windows Messenger Service. Windows Messenger Service, not to be confused with the instant-messaging program Windows Live Messenger, is primarily designed for use on a network and was traditionally used by network administrators to broadcast pop-up messages to computer users about service outages.
The messages resembled system alerts with alarmist wording such as “WARNING! WINDOWS REQUIRES IMMEDIATE ATTENTION. Windows has detected CRITICAL SYSTEM ERRORS. … FAILURE TO REPAIR AN INVALID OR CORRUPT SYSTEM REGISTRY MAY LEAD TO DATA LOSS OR SYSTEM FAILURE!”
“The defendant’s deceptive pop-ups directed consumers to Web sites where they were encouraged to download a free trial version of software that will scan their computer for registry errors,” said Assistant Attorney General Katherine Tassi. “In every case, the scan identified ‘critical errors.’ In order to remove the so-called errors, consumers were told they had to pay $29.95 or more to buy the full version of the program.”
Corella was also found to have transmitted bundled software that changes Internet browser home pages. While downloading a trial version of Registry Doc, an unrelated search toolbar called Twikibar installed itself on users’ computers.
HoanVinh V. Nguyenphuoc and FixWinReg agreed to a settlement in October 2007. Under the agreement, which did not include a finding or admission of wrongdoing, he paid $25,000 in attorneys’ costs and fees. He’ll pay an additional $75,000 in civil penalties if he fails to comply with the settlement, which includes similar injunctive provisions prohibiting misrepresentations in marketing products or services.
The Attorney General’s Consumer Protection High-Tech Unit has brought a total of six lawsuits under Washington’s Computer Spyware Statute, RCW 19.270, since the law was approved by the Legislature in 2005.
McKenna thanks Tassi and forensics investigator Rebecca Henderson for their work on this case.
“Our Consumer Protection High-Tech Fraud Unit’s record speaks volumes. Assistant Attorney General Katherine Tassi, who led this case, has a black belt in kung fu and another in fraud fighting,” McKenna said.
Securelink Networks and Manuel Corona, Jr. summary judgment
NJC and Rudy O. Corella summary judgment
FixWinReg and Nguyenphuoc Settlement
Securelink, NJC and FixWinReg Complaint