Washington State Attorney General Bob Ferguson announced a lawsuit against one of the biggest independent tech support providers in the world, iYogi, and its President, Vishal Dhar, to stop a scam that uses deception and scare tactics to pressure consumers into buying unnecessary tech support services.
The lawsuit, filed in King County Superior Court, alleges iYogi’s tactics are unfair and deceptive business practices that violate Washington’s Consumer Protection Act. The lawsuit also alleges iYogi induced consumers to install unnecessary software as part of its ploy to coerce them into buying tech support services, a violation of Washington’s Computer Spyware Act.
“Tech support scams defraud consumers and often trade on the good reputations of legitimate businesses,” said Ferguson. “This lawsuit sends a message to tech support scammers that my office will hold them accountable.”
Tech support scams are a national problem with local ramifications. According to Microsoft, an estimated 71,000 Washingtonians lose $33 million each year to these schemes. Nationwide, an estimated 3.3 million Americans suffer $1.5 billion in annual losses from tech support scams.
“We applaud the Washington State Attorney General’s Office for its efforts to protect consumers from tech support scams that have reached epidemic levels in recent years,” said Brad Smith, Microsoft’s President and Chief Legal Officer. “Over the past 18 months alone, Microsoft has received more than 180,000 customer calls regarding tech support fraud. Today’s announcement is an important step toward addressing this issue, which disproportionately affects the most vulnerable segments of our society.”
According to AARP State Director Doug Shadel, tech support scams can disproportionately affect older adults.
As part of its investigation, the AGO uncovered the following tactics used by iYogi to sell consumers unneeded tech support services:
- In online ads, iYogi associates itself with major technology companies such as Microsoft, Apple and HP. When consumers call iYogi, the representative claims to provide tech support services on behalf of whatever company the consumer inquires about.
- After gaining remote access to the consumer’s computer, iYogi identifies benign but complex-looking files and claims the “infected files” harm the computer. iYogi misleads the consumer into believing he or she must download iYogi’s diagnostic software to fully identify the computer problems.
- iYogi then produces a diagnostic report on the consumer’s screen and claims there is malware or other serious defects. iYogi misrepresents the report by telling the consumer these infected files are harming the computer, when in fact the identified items are often routine programs that pose no threat.
- Once iYogi has alarmed the consumer, the representative proceeds to aggressively sell a tech support plan to fix the non-existent problems — 1 year for $140 or 5 years for $379. iYogi claims the plans cover tech support needs for the length of the contract.
- iYogi also informs the consumer the computer doesn’t have antivirus software and tries to sell the consumer iYogi’s antivirus software for up to $80, even if an existing antivirus is already installed.
- iYogi also states the consumer needs to update to the Windows 10 operating system, or the computer will be harmed, which it will not. iYogi uses this scare tactic to coerce the consumer into buying Windows 10 for $80, even though Microsoft offers the upgrade for free.
- The AGO investigation confirmed that iYogi identified such “problems” even on a computer with a newly installed operating system.
The state seeks to stop these illegal business practices and recover money for Washington victims. The total number of Washingtonians affected will be identified during the lawsuit, but is estimated to be in the hundreds, if not thousands. The state may seek up to $2,000 in civil penalties for each violation of the Consumer Protection Act and $100,000 per violation of the Computer Spyware Act.
In 2005, Washington became one of the first states to adopt a law explicitly prohibiting spyware activities and imposing serious penalties on violators. The statute doesn’t stop at outlawing programs that collect personal information, but uses a broader definition of “spyware” and punishes those who mislead users into believing software is necessary for security. As a result of Attorney General request legislation, the law was updated in 2008 to create additional liability for third-parties that permit the transmission of spyware and to address new types of deceptive behaviors, such as misrepresenting the need for computer repairs.