Microsoft files suit against alleged tech support scammers

Over one-third of U.S. citizens contacted by scammers fall for the scam, according to Microsoft

Microsoft is finally cracking down on scammers who offer to fix non-existent computer problems for hundreds of dollars. In a first strike, Microsoft sued several U.S. companies it said are involved in fake tech support scams.

For years, people have been receiving calls from companies pretending to be official Microsoft tech support staff, who try to convince the victim that their computer is infected with a virus. The scammers often offer to deal with it for a fee.

It is a big problem. Since May 2014 alone, Microsoft has received over 65,000 customer complaints regarding fraudulent tech support scams. According to a survey issued by Microsoft, over one-third of U.S. citizens fall for the scams once contacted, causing them to suffer approximately $1.5 billion in financial losses each year.

In an attempt to stop the scammers, Microsoft filed a civil lawsuit with the U.S. District Court for the Central District of California against a California company trading as Omnitech Support, and related companies, for unfair and deceptive business practices and trademark infringement, Microsoft said Thursday.

Omnitech is a name used by Customer Focus Services (CFS), which according to its website is a pioneer in Indian offshoring and call-center outsourcing. It also specializes in tech support outsourcing. The companies were charged with misusing Microsoft's name, registered trademarks and service marks in connection with the provision of phony tech support services.

To get a grip on how these scammers operate, Microsoft conducted multiple test calls and online chat sessions with representatives of websites owned by CFS. In each case, Microsoft used a computer that its experts confirmed did not contain malware, viruses, or any other harmful computer files or programs, according to the complaint.

While visiting fixnow.us, one of the sites operated by CFS, a Microsoft investigator was connected with a technician called Terry who asked to remotely access the investigator's computer.

When allowed to do this, Terry took over full control of the computer and claimed that the Windows file system modules were "corrupted due to the presence of polymorphic infections and other harmful viruses," claiming to have found 75 issues of concern. However, the alleged issues involved benign junk files and folders, none of which contained viruses or malware, Microsoft said.

Nevertheless, Terry claimed that if the issue was not fixed, it could lead to potential loss of data including emails, personal files and financial data.

He asked for $250 to fix the issue and when that was paid, he asked for an additional $610 to "fine tune" the computer which he claimed was necessary because the infections had also damaged some other parts of the system.

The investigator was then connected to another technician called Kristin, who ran a series of free applications on the computer including Microsoft's own FixIt application which changes Windows settings but is not a virus or malware application, as well as a free program called CCleaner.

Moreover, she also downloaded a program titled "Internet Explorer Passwords Viewer" for which she had to override Microsoft Security Essentials which would have blocked the program. She used it in an attempt to view passwords for two of the investigator's e-mail accounts, after which she covered up her tracks, Microsoft said.

In some cases, scammers even installed malicious software, Microsoft said. It asked the court to issue a ban against the companies and award damages.

Microsoft warned users contacted by so-called Microsoft tech support not to pay for any software or services and to hang up the phone if there is a fee involved. It also asked to report any of these scams to the authorities. They can also be reported on a Microsoft website.

CFS did not immediately reply to a request for comment.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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