Spyware operations shut down by FTC

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The nation's consumer watchdog announced today that it has halted two spyware operations - one of which was forced to pay more than $4 million.

The Federal Trade Commission (FTC) had sued Sanford Wallace, and his company Smartbot.Net, as well as Odysseus Marketing, and its principal, Walter Rines, claiming that the companies' downloads were unfair and deceptive to consumers.

One piece of Smartbot.Net's spyware caused a PC's CD-ROM tray to open, telling the user, "If your CD-ROM's drive's open...You desperately need to rid your system of spyware pop-ups immediately! Spyware programmers can control your computer hardware if you failed to protect your computer right at this moment! Download Spy Wiper now!"

The promoted programs sold for $30.

A judgment against Smartbot.Net ordered them to pay more than $4 million in profits, and prohibited them from downloading spyware onto PCs.

The FTC said that another settlement was reached with defendants OptinTrade and Jared Lansky, who allegedly disseminated ads for Smartbot.Net's spyware. They were ordered to give up $227,000 in profits.

In another case, the FTC issued a revised injunction against Odysseus Marketing, claiming the company lured PC users to its website by offering anti-spyware products, before capturing personal information. The company would then sell access to the collected personal data.

The injunction bars the company from downloading spyware software onto PCs.

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