FTC Orders Spyware Operator To Pay $4 Million
Home > News	May 7, 2006 11:20 PM

Federal Trade Comission ordered Sanford Wallace to pay back more than $4 million that he made by selling a anti-spyware software that fixes imaginary problems. Wallace and his SmartBOT company were selling two purported anti-spyware programs Spy Wiper and Spy Deleter.

According to FTC, Sanford Wallace exploited an Internet Explorer vulnerability, making users to believe that their computers are infected. The real spyware included a small program that opened the CD-ROM tray and displayed the message "If your cd-rom 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 Spy Wiper and Spy Deleter were sold for $30. FTC accused Wallace for spyware operations in 2004.

The order, issued by the U.S. District Court in New Hampshire, also bars Wallace and his company from:

-- Downloading spyware and any software onto consumers’ computers without consent;

-- Redirecting consumers' computers to sites or servers other than those the consumers selected to visit;

-- Changing any Web browser’s default home page. A settlement with defendants OptinTrade and Jared Lansky prohibits the same practices. Lansky, an ad broker who distributed ads containing Wallace's spyware, will give up $227,000 in spyware-related profits.

In the 1990s Wallace was known as "Spamford" or "Spam King" because he headed a company, Cyber Promotions, that sent as many as 30 million junk e-mails daily to consumers.