AG sues one of world’s biggest tech support providers to stop deceptive scam

Hundreds, perhaps thousands, of Washingtonians scammed up to $540 each
 
SEATTLE — Attorney General Bob Ferguson today announced a lawsuit against one of the biggest independent tech support providers in the world, iYogi, and its President, Vishal Dhar, to stop a scam that uses deception and scare tactics to pressure consumers into buying unnecessary tech support services.
 
The lawsuit, filed in King County Superior Court, alleges iYogi’s tactics are unfair and deceptive business practices that violate Washington’s Consumer Protection Act. The lawsuit also alleges iYogi induced consumers to install unnecessary software as part of its ploy to coerce them into buying tech support services, a violation of Washington’s Computer Spyware Act.
 
The state seeks to stop these illegal business practices and recover money for Washington victims. The total number of Washingtonians affected will be identified during the lawsuit, but is estimated to be in the hundreds, if not thousands. The state may seek up to $2,000 in civil penalties for each violation of the Consumer Protection Act and $100,000 per violation of the Computer Spyware Act.
 
“Tech support scams defraud consumers and often trade on the good reputations of legitimate businesses,” said Ferguson. “This lawsuit sends a message to tech support scammers that my office will hold them accountable.”
 
Tech support scams are a national problem with local ramifications. According to Microsoft, an estimated 71,000 Washingtonians lose $33 million each year to these schemes. Nationwide, an estimated 3.3 million Americans suffer $1.5 billion in annual losses from tech support scams.
 
“We applaud the Washington State Attorney General’s Office for its efforts to protect consumers from tech support scams that have reached epidemic levels in recent years,” said Brad Smith, Microsoft’s President and Chief Legal Officer. “Over the past 18 months alone, Microsoft has received more than 180,000 customer calls regarding tech support fraud. Today’s announcement is an important step toward addressing this issue, which disproportionately affects the most vulnerable segments of our society.”
 
According to AARP State Director Doug Shadel, tech support scams can disproportionately affect older adults.
 
“Despite emerging years ago, the tech support scam continues to plague consumers around the nation, generating more reports to the AARP Foundation Fraud Fighter Call Center here in Seattle (800-646-2283) than any scheme except maybe the IRS Imposter Scam,” says Shadel. “The bottom line is that manufacturers of computers DO NOT make phone calls or send ads to individual customers about problems with their machines. The best ‘fix’ for this problem is to simply hang up or contact your service provider independently with questions.”
 
Overview of iYogi
 
Based out of New York, iYogi has over 5,000 employees with call centers in India. It claims to be one of the biggest independent tech support providers in the world serving over 3 million customers across 11 countries.
 
iYogi provides subscription-based remote support for personal technological devices such as computers and tablets.
 
This includes:

• Computer diagnostic and repairs;
• Security protection;
• Performance optimization; and
• Antivirus software sales.

Overview of the scam
 
As part of its investigation, the AGO uncovered the following tactics used by iYogi to sell consumers unneeded tech support services:
 

1. In online ads, iYogi associates itself with major technology companies such as Microsoft, Apple and HP. When consumers call iYogi, the representative claims to provide tech support services on behalf of whatever company the consumer inquires about.
2. After gaining remote access to the consumer’s computer, iYogi identifies benign but complex-looking files and claims the “infected files” harm the computer. iYogi misleads the consumer into believing he or she must download iYogi’s diagnostic software to fully identify the computer problems.
3. iYogi then produces a diagnostic report on the consumer’s screen and claims there is malware or other serious defects. iYogi misrepresents the report by telling the consumer these infected files are harming the computer, when in fact the identified items are often routine programs that pose no threat.
4. Once iYogi has alarmed the consumer, the representative proceeds to aggressively sell a tech support plan to fix the non-existent problems — 1 year for $140 or 5 years for $379. iYogi claims the plans cover tech support needs for the length of the contract.
5. iYogi also informs the consumer the computer doesn’t have antivirus software and tries to sell the consumer iYogi’s antivirus software for up to $80, even if an existing antivirus is already installed.
6. iYogi also states the consumer needs to update to the Windows 10 operating system, or the computer will be harmed, which it will not. iYogi uses this scare tactic to coerce the consumer into buying Windows 10 for $80, even though Microsoft offers the upgrade for free.

The AGO investigation confirmed that iYogi identified such “problems” even on a computer with a newly installed operating system.
 
The AGO alleges these tactics are violations of the Washington Consumer Protection Act and Computer Spyware Act.
 
In 2005, Washington became one of the first states to adopt a law explicitly prohibiting spyware activities and imposing serious penalties on violators. The statute doesn’t stop at outlawing programs that collect personal information, but uses a broader definition of “spyware” and punishes those who mislead users into believing software is necessary for security. As a result of Attorney General request legislation, the law was updated in 2008 to create additional liability for third-parties that permit the transmission of spyware and to address new types of deceptive behaviors, such as misrepresenting the need for computer repairs.
 
Tech support scam variations
 
There are many variations of tech support scams beyond the tactics iYogi employs. Some rely on massive spam campaigns that promise a faster, more secure computer and draw readers to a URL; others use pop-up ads that falsely claim the user's machine is infected with malware. A common tactic involves unsolicited telephone calls where callers pose as computer support technicians. While the tactics vary, the goal is the same: to gain access to your computer and ultimately your money and personal information.
 
How to avoid the scam
 
The Attorney General’s Office offers the following tips to avoid tech support scams:
 

• Never give control of your computer to a third party unless you can confirm it is a legitimate representative from a company where you’re already a customer;
• Ask if there is a fee or subscription associated with the “service.” If there is, hang up;
• Do not provide Social Security numbers, banking, or credit card or other financial information; and
• Protect personal computers with legitimate and updated security software.

Victim of a tech support scam? Contact the Attorney General’s Office
 
If you believe you are a victim of the iYogi scam, or any other tech support scam, file a consumer complaint with the Attorney General’s Office at /file-complaint.
 
For additional Internet safety tips, advice and information visit the Attorney General's website, here.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.

Media Contact:

Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov

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