SEATTLE (Legal Newsline) - A software company that sold programs to more than 19,000 Washington residents must offer refunds to some of those consumers as part of a settlement announced Tuesday by Attorney General Rob McKenna.
The Attorney General's Office accused Philadelphia-based Ascentive, LLC, of violating the state's Computer Spyware Act, Consumer Protection Act and Commercial Electronic Mail Act through the use of deceptive marketing methods including spam and persistent pop-ups, misleading free "scans" and alarmist warnings that suggest a computer has severe problems, unfair billing practices and a cumbersome cancellation process.
"In today's Internet marketplace, some companies have resorted to trickery to boost profits," McKenna said in a statement.
"But consumer protection laws demand integrity to ensure consumers know what they're buying and to create a level playing field for competing retailers. Today's settlement makes it clear where we draw the line between aggressive marketing and deception."
Ascentive, perhaps best known for its FinallyFast.com commercials, sells a variety of programs purported to improve Internet connection speeds and remove system errors. They include ActiveDefender, ActivePrivacy, ActiveSpeed, PC ScanandSweep, PC Speedscan Pro, RAMRocket, Spyware Striker Pro and WINRocket.
According to the state's complaint, Ascentive:
- Misrepresented that consumers' computers are at risk of harm through banner ads that resemble warning messages, pop-ups and graphical images;
- Sent deceptive e-mails that suggest the company's software is recommended by Microsoft;
- Offered free scans that were bundled with other programs that launched excessive pop-up warnings and nagging alerts until the user either purchased the company's product or uninstalled the software. The scans often identified harmless files as errors;
- Failed to disclose that by downloading one program in its suite of services, an additional program -- essentially an advertisement for other software products -- would also be installed;
- Added additional products to orders during the checkout process. Consumers had to uncheck boxes next to the products in order to avoid being charged;
- Failed to clearly disclose that consumers who purchased products were actually buying an annual license and would be automatically billed each year unless they cancel; and
- Made it difficult for consumers to cancel orders or obtain refunds.
Under the settlement filed in King County Superior Court, Ascentive agreed to a number of restrictions on its marketing and billing practices. The company also will provide restitution to consumers who purchased both a backup CD and the company's Extended Download Service but did not use them.
In addition, Acentive will pay a $20,000 civil penalty, plus $58,000 to reimburse the Attorney General's Office for attorneys' fees and legal costs. An additional $150,000 in civil penalties are suspended provided the company complies with the settlement terms.
The Attorney General's Office estimates that about 5,500 consumers are eligible for refunds of about $17.90 plus tax.
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.