State files spyware lawsuit against New York firm

In a test of Washington's new anti-spyware legislation, state Attorney General Rob McKenna and Microsoft announced a lawsuit today against a New York company that allegedly used misleading e-mail and other questionable online tactics to sell security software.

Secure Computer of White Plains, N.Y., made deals with e-mail advertisers in India, New Hampshire and Portland to sell its "Spyware Cleaner" via unsolicited e-mails, some pretending to be from Microsoft, according to the lawsuit McKenna filed in U.S. District Court in Seattle on Tuesday.

The suit also details how consumers using Google to search for Microsoft anti-spyware products may have ended up at Secure Computer's Web site if they clicked on allegedly misleading ads.

McKenna said the company would also download software onto consumers' computers without consent, change security settings and "deceive you into buying their own product."

"They're very sophisticated in how they push it," he said in an interview Tuesday. "You go to a Web site and you click it and instead of seeing what you want to see, you get a scary-looking notice that your computer may be infected by spyware."

Named in the suit are Secure Computer President Paul Burke and Gary Preston, registered owner of the Web sites myspywarecleaner.com and securecomputerllc.com. Neither could be reached for comment last night.

McKenna said his office and Microsoft separately have been investigating the company over the past year and their investigators "compared notes" before the suit was filed.

It's unclear how many people were affected. McKenna said the company sold "thousands and thousands" of copies of its software for $49.95.

The suit said consumers in the state and elsewhere also got e-mails that appeared to come from "MSN Member Services" with subject lines that said "Special Security Alert for MSN Members," the suit said.

The state is seeking damages of up to $100,000 per violation of the state Spyware Act, approved last year. McKenna filed the suit under the federal CAN-SPAM Act and state junk-mail and consumer-protection laws.

McKenna provided more details this morning when he and Microsoft Deputy General Counsel Nancy Anderson announce the suit in Seattle. When asked whether Microsoft had any culpability in this issue, Anderson laid the blame squarely on Secure Computer.

"Consumer fraud and consumer deceptive practices are perpetuated by these deceptive businesses," she said. "That is the heart of the problem."

They were joined by Jim Sorensen, a graphic designer from Everett, who said he was deceived into downloading Secure Computer's program.

"I feel more like a dupe than anything," Sorensen said.

Tuesday's filing gives a glimpse into methods some companies use to sell products online through affiliates.

The suit says Secure Computer solicited affiliates to sell its "Spyware Cleaner," provided advertising material and offered affiliates 75 percent of the $49.95 purchase price.

The product was sold via display ads and pop-up ads as well as direct-marketing e-mails.

One affiliate named in the suit advertised on Google under "Microsoft Spyware Cleaner," the suit says.

That ad appears as a paid link when the search terms "Microsoft anti-spyware," "Microsoft antispyware" and "Microsoft spyware cleaner" are entered into the search engine.

Users who click on the headline are taken to myspywarecleaner.com, rather than to Microsoft's antispyware-product site, the suit says.

McKenna said today that his office wants to hear from people who have purchased the program or performed the free computer scan that the Web site offers. Those people should file an online complaint at http://www.atg.wa.gov or call 1-800-551-4636.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

Seattle Times technology reporter Kim Peterson contributed to this report.