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State claims pop-up ads violated computer spyware and consumer protection laws
SEATTLE – Attorney General Rob McKenna today announced a settlement with a New York man that provides restitution to Washington state consumers who purchased the software program QuikShield Security. The agreement resolves allegations that James Lane enticed consumers to purchase his software through the use of pop-up ads that simulated Microsoft Internet Explorer alerts and that he failed to provide an easy method for consumers to remove the program from their computers.
“It is illegal in Washington to induce consumers to download software under the guise that the program is needed to protect themselves and their computers,” McKenna said. “Businesses that attempt to deceive or mislead consumers should be warned that the Attorney General’s Office will continue to use our enforcement powers to protect the public. But companies must also do a better job of complying with the law. The same rules apply for online advertising as they do to print, radio and television.”
The consent decree filed today in King County Superior Court concludes a three-month investigation by the Attorney General’s Consumer Protection High-Tech Unit. The agreement does not include any specific findings of wrongdoing. The state’s complaint filed simultaneously alleged violations of the state Computer Spyware Act and Consumer Protection Act.
Lane cooperated with the state’s investigation. He did not admit any fault as part of the agreement, but agreed to fully reimburse customers in Washington State who purchased QuikShield and request a refund. He must also pay $10,000 in civil penalties, with $5,000 suspended on compliance with the settlement terms, and $6,444 in attorneys’ costs and fees.
Lane owns and sells QuikShield Security, a program purported to protect consumers’ computers from receiving pop-up advertisements, block “chat” windows, and clear a computer’s Web surfing history.
According to the state’s complaint, Lane advertised the program through the use of a pop-up ad that simulated a Microsoft Internet Explorer system alert. The ad read,” Security Alert – your computer is vulnerable to receiving excessive popup ads. Would you like to install a popup blocker to prevent popup ads from appearing on your screen?”
“Numerous consumers downloaded QuikShield in response in response to Lane’s ad,” said Assistant Attorney General Katherine Tassi. “It convincingly resembled a warning from your computer.”
Any attempt to close the popup by clicking “OK,” “Cancel” or the “X” in the upper-right corner launched a Web site offering consumers the opportunity to install QuikShield “absolutely free.” If a consumer accepted the offer, the program installed itself.
“But our investigation showed that there was never any intent to offer a program at no charge,” Tassi said. “Because consumers who downloaded the program then received pop-ups that resembled error messages, followed by a solicitation to purchase the program for $19.95.”
Following installation, any consumer who attempted to shut down QuikShield encountered additional problems after clicking on “exit” on the icon in the system tray. Upon rebooting, another pop-up appeared resembling a system warning. It stated, “A critical component is not functioning. Your computer may be vulnerable. Re-activate now to ensure continued protection.”
The only obvious way to close to the pop-up was to click “OK,” at which point a QuikShield Web page opened displaying the following message: “If you received a message that your security software is not functioning: For a limited time, you may purchase a non-expiring version of QuikShield,” which will allegedly protect your computer from “popup window viruses.”
The state’s complaint also alleged that Lane intentionally misrepresented that the software could be uninstalled by the computer user. In fact, the investigation found that the program did not appear in the Add/Remove Programs option in the Windows control panel. Even if a consumer located the QuikShield folder on the computer’s hard drive and deleted it, the software remained on the computer because it actually resided in the Windows directory. Furthermore, a difficult-to-find uninstall option removed only some program components.
The settlement restrains Lane from failing to provide an operable install function for any products he sells or markets, misrepresenting the source of an advertisement, misrepresenting that security or privacy functions on a consumer’s computer are not working properly, or using the “X” button or other images typically associated with closing a window to perform any other function. It also prohibits him from failing to clearly identify the cost of a product or service or creating a false sense of urgency or need to purchase a product or service.
Refund Requests
Washington consumers who purchased QuikShield can request a refund by filing a written complaint with the Attorney General’s Office. Complaints can be filed online at www.atg.wa.gov or request a complaint form by calling 1-800-551-4636 (toll-free number only available in Washington State). Consumers must file complaints within 45 days. The settlement does not apply to consumers in other states who purchased QuikShield.
Additional Materials
James Lane Complaint re: QuikShield
James Lane Consent Decree re: QuikShield
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Media Contacts: Katherine Tassi, Assistant Attorney General, (206) 389-3974
Kristin Alexander, Public Information Officer, (206) 464-6432