Markets Wired

The Federal Trade Commission has put the brakes on the business practices of an operation that was selling spyware and showing customers how to remotely install it on other people’s computers without their knowledge or consent.

The FTC is announcing a settlement that bars the sellers of the “RemoteSpy” keylogger from advertising that the spyware can be disguised and installed on someone else’s computer without the owner’s knowledge. It requires that the software provide notice that the program has been downloaded and obtain consent from computer owners before the software can be installed.

In 2008, the FTC filed suit against CyberSpy Software, LLC and its owner, Tracer R. Spence, alleging they were violating the law by advertising and selling RemoteSpy, a keylogger software program that the defendants touted as a “100% undetectable” way to “Spy on Anyone. From Anywhere.” According to papers filed with the court, the defendants provided their clients with detailed instructions explaining how to disguise the spyware as an innocuous file, such as a photo, attached to an e-mail. When the e-mail recipient clicked on the attachment, the RemoteSpy program was downloaded and installed without the victim’s knowledge. The spyware recorded every keystroke typed on an infected computer; captured images of the computer screen; obtained passwords, and recorded Web sites visited. To access the information gathered and organized by the spyware, RemoteSpy clients logged into a Web site maintained by the defendants.

The final Order bars the defendants from providing purchasers with the means to disguise the product as an innocent file or e-mail attachment. It also requires that they inform purchasers that improper use of the software may violate state or federal law. The final Order also requires the defendants to take measures to reduce the risk that their spyware is misused, encrypt data transmitted over the Internet, police their affiliates to ensure they comply with the order, and remove legacy versions of the software from computers on which it was previously installed.

The Commission vote to accept the final settlement Order was 5-0. The Order was entered in the U.S. District Court for the Middle District of Florida.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated final orders have the force of law when signed by the judge.

The Federal Trade Commission works for the consumer 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, click http://www.ftccomplaintassistant.gov or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.

(FTC File No X090011)