Markets Wired

At the request of the Federal Trade Commission, a U.S. District Court issued a preliminary injunction on November 25, 2008 barring Florida-based CyberSpy Software, LLC and its principal Tracer R. Spence from engaging in certain marketing activities that the FTC has alleged to be deceptive and unfair practices under Section 5 of the FTC Act. The FTC seeks to permanently bar the unfair and deceptive practices and require the defendants to give up their ill-gotten gains.

According to papers filed with the court, the defendants provided RemoteSpy clients with detailed instructions regarding how to disguise the spyware as an innocuous file, such as a photo, attached to an email. When consumer victims clicked on the disguised file, the keylogger spyware silently installed in the background without the victim’s knowledge. This spyware recorded every keystroke typed on the victim’s computer (including passwords); captured images of the computer screen; and recorded Web sites visited. To access the information gathered and organized by the spyware, RemoteSpy clients would log into a Web site maintained by the defendants.

Defendants touted RemoteSpy as a “100% undetectable” way to “Spy on Anyone. From Anywhere.” According to the FTC complaint, the defendants violated the FTC Act by engaging in the unfair advertising and selling of software that could be: deployed remotely by someone other than the owner or authorized user of a computer; installed without the knowledge and consent of the owner or authorized user; and used to surreptitiously collect and disclose personal information. The FTC complaint also alleges that the defendants unfairly collected and stored the personal information gathered by their spyware on their own servers and disclosed it to their clients. The complaint further alleges that defendants provided their clients with the means and instrumentalities to unfairly deploy and install keylogger spyware and to deceive consumer victims into downloading the spyware

The U.S. District Court for the Middle District of Florida found that the RemoteSpy software program is a remotely deployed keylogger that is “designed to be installed without the knowledge or consent of the owner or authorized user of a computer, and defendants’ marketing touts this function.” The court found that the sale and operation of RemoteSpy is likely to cause substantial harm to consumers that cannot be reasonably avoided and is not outweighed by countervailing benefits to consumers or to competition. “[T]he clandestine remote installation of RemoteSpy on the computer of an unrelated person is fraught with potential abuse. The ability of RemoteSpy to invade the privacy of an unsuspecting victim is, indeed, alarming. And it is to this use that defendants direct their promotional and instructional materials. In light of these marketing efforts, the potential for devastating abuse far outweighs the possibility of benign use.”

The court ordered the defendants, during the pendency of the case, to stop promoting, selling, or distributing RemoteSpy by means of informing or suggesting to customers that it may be, or is intended to be, surreptitiously installed on a computer without the knowledge or consent of the computer’s owner. They are also barred from providing others with the means and instrumentalities with which to make false or misleading statements of material fact regarding any keylogger program, including falsely representing that a keylogger is an innocuous file or attachment such as photos or music. The preliminary injunction order also contains provisions relating to record keeping and distribution of the order. A copy of the complete order is available on the Commission’s website.

A complaint filed by the Electronic Privacy Information Center (“EPIC”) brought the RemoteSpy software to the FTC’s attention.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File No. 0823160)
(Cyberspy NR.wpd)