Markets Wired

A Utah-based company and its owner are permanently banned from offering tech support products and services to consumers as part of a settlement with the Federal Trade Commission resolving allegations that their scheme tricked consumers into believing their computers were infected with viruses in order to sell them costly computer repair services.

In a complaint filed in February, the FTC alleged that Elite IT Partners, Inc., and its President and CEO, James Martinos, used Internet ads targeting consumers looking for help to recover their email passwords. Once they reached consumers, Elite IT’s telemarketers often claimed to be associated with well-known companies like Microsoft and Yahoo!, and pressured consumers to provide access to their computers. The telemarketers then ran bogus “diagnostic” tests, claimed consumers’ computers and personal information were in imminent danger, and pitched consumers costly and unnecessary repair services and antivirus software.

“Companies selling tech support services shouldn’t misrepresent who they are and shouldn’t scare consumers into buying services by falsely stating that a consumer’s computer is infected with viruses,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “When companies trick people into buying unnecessary tech support services, the FTC will take decisive action to stop them.”

The settlement imposes a $13.5 million judgment against Martinos and Elite IT, which will be suspended upon payment by Martinos of $173,500 and the turnover of other assets, due to an inability to pay the full amount. If found to have misrepresented their finances, Martinos and his company will be required to pay the full amount. In addition, Martinos and Elite IT are permanently prohibited from offering or marketing tech support products or services to consumers and misrepresenting their cancellation or refund policies associated with a product they sell. The settlement also prohibits Martinos and his company from falsely claiming an affiliation with another company or that a consumer’s product is infected with a computer virus.

The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the District of Utah. The Court approved the final order on December 9, 2019.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.