Privacy & Information Security Law Blog

After potential warning signs spanning several years, on March 14, 2024, the Federal Trade Commission brought an enforcement action against two entities selling virus protection software to consumers via online and telemarketing sales. According to the FTC’s complaint, for several years the entities, Restoro Cyprus Limited and Reimage Cyprus Limited, received excessive chargebacks on purchases, numerous consumer complaints made directly to the entities, and various indirect consumer complaints made to vendors, telecoms service providers and others. 

The entities allegedly used marketing pop-ups that deceptively suggested that the consumer’s computer was infected with a virus or another “issue” that needed to be fixed. The complaint alleges that after completing a free scan, consumers were encouraged to purchase software to “repair” their computer. Telemarketers allegedly showed consumers—via remote access to their computer—routine ‘warnings’ on their Windows Event Viewer, or virus scans from other computers to lure consumers into purchasing software packages or technician assistance. Under the proposed order, which requires court approval, the entities must pay a $26 million penalty and are enjoined from engaging in any deceptive telemarketing or misrepresentations regarding computer security or performance issues. 

Developing an accurate and non-deceptive marketing plan and call script is a necessary first step for any entity. While the types of alleged misrepresentations at issue here may not be relevant to many telemarketers, the recent enforcement action serves as a good reminder to any telemarketer that a comprehensive oversight and monitoring program may help detect potential unfair or deceptive acts and practices early on. Monitoring consumer complaints, chargebacks and indirect complaints can catch potential areas of customer confusion that could eventually give rise to litigation or regulatory risk.