Posted on March 29, 2019 at 12:11 PM
FTC Forces Office Depot to Fork Over $25 Million for Scam
Office Depot and tech support firm Support.com have been forced to pay a combined $35 million over a scandal involving fake malware scan service.
Office Depot, along with its subsidiary OfficeMax, has been forced to cough up $25 million to the FTC following a finding that showed it defrauded customers by using a fake malware scan. Support.com, the company that provided the so-called malware scanner, was ordered to pay $10 million in a ruling that many industry watchers say is a sign of increasing technological education within the FTC.
Fake scan cost consumers millions
OfficeDepot, it’s subsidiary OfficeMax and Support.com all combined to use a program called PC Health Check to run a fraudulent checkup of their customers’ computers. They claimed the program would rn an in-depth scan of the computer in question and show if any malware was found on the target system. However, the FTC found that the program was only using the answers from a pre-checkup questionnaire to show problems.
The four questions prior to running the software were designed to flag malware based solely on the answers to the questions that people had given. The FTC found that the program was not doing what it actually said it would do, and this constituted fraud on behalf of the companies involved.
Questions that the software asked was along the lines of “is your computer slow?”, “does your computer frequently crash?”, “does your computer show pop up ads?” and “have you gotten virus warnings?”. If any of these boxes were ticked, the program would then go on to recommend the customer to purchase extensive and expensive technical fixes. These technical fixes could run up to hundreds of dollars for every individual service.
The scheme was widespread and well known within the company
According to the complaint received by the FTC, both OfficeDepot and OfficeMax gave instructions to their employees to run the program on every single computer that was brought into their stores. The services that the program offered scammed those people out of tens of millions of dollars.
The complaint also alleged that the fake malware scheme was run for 7 years. The scam was started in 2009 and ran until November 2016. The reason it was stopped at that particular time is because of news coverage. A CBS affiliate, KIRO-7, flagged the fake scan and service scam. This was despite OfficeDepot being told by employees for years that it was bogus.
One example found int he complaint was of an employee complaining to upper management sometime in 2012. The employee was quoted int he complaint saying that they could not “justify lying to a customer or being TRICKED into lying to them for our store to make a few extra dollars.”
That quote by itself is damning enough, as the FTC found proof that upper management did indeed receive that complaint, among many others. The complaint also showed that OfficeDepot knew that the program did not do what it said it did. They changed policy in 2013, telling their stores to not run the program after repairs. Ostensibly, this would be to prevent people from clicking any of the questions and seeing that the repair “wasn’t helping”.
The FTC has said that it will use the $25 million paid by OfficeDepot and the $10 million paid by Support.com to repay victims of the fake malware scam. OfficeDepot did not comment in any media about the result of the FTC investigation.
The chairman of the FTC, Joe Simons, did, however, have something to say. He said that this
“case should send a strong message to companies that they will face stiff consequences if they use deception to trick consumers into buying costly services they may not need.”
