Office Depot and a tech support service have agreed to pay the Federal Trade Commission a total of $35 million to settle charges they lied to customers by convincing them their products had been hacked, the FTC announced Wednesday.
Office Depot and Support.com will pay $25 million and $10 million, respectively, for their role in a years-long scheme to use a software program, known as PC Health Check, as a tool to convince customers to buy tech support from Office Depot, the FTC said.
A complaint alleges that both companies configured PC Health Check to report it had found malware based on whether customers agreed with statements such as “My PC recently became much slower or is too slow to use,” rather than true malware scans. Both companies knew about the problem as early as 2012 yet they continued marketing and using PC Health Check until late 2016, the FTC said.
“Based on the deceptive representations made by Defendants through the PC Health Check Program, consumers purchased computer diagnostic and repair services that could cost more than $300 per service,” the FTC complaint states. “Defendants bilked unsuspecting consumers out of tens of millions of dollars from their use of the PC Health Check Program to sell costly diagnostic and repair services.”
Office Depot employees then would “repair” the computers that appeared to be hacked, claiming to find other problems that cost money to resolve. When a whistleblower told Seattle’s KIRO7 news in 2016 about the policy, undercover reporters asked Office Depot technicians to examine their computers for viruses. There, customer service representatives claimed to find problems in machines that had never been connected to the internet, KIRO7 reported.
Both firms have violated the FTC Act’s prohibition against deceptive practices, the commission said. The fines will go toward reimbursing customers who had been bilked as part of the scam.
“Customers have a hard enough time protecting their computers from malware, viruses, and other threats,” FTC Chairman Joe Simons said in a statement. “This case should send a strong message to companies that they will face still consequences if they use deception to trick consumers into buying costly services they may not need.”