Walter Rines, the former partner of self-proclaimed spam king Sanford Wallace, has settled charges that he and his company, Odysseus Marketing, secretly downloaded spyware on consumers’ computers, the Federal Trade Commission announced earlier today.
The FTC last October charged Rines with luring consumers to Web sites by advertising bogus free software, which had spyware bundled into it. Rines also distributed the spyware by exploiting security vulnerabilities in Internet Explorer, the FTC alleged.
According to the FTC, Rines’ spyware intercepted and replaced search results provided to users who queried popular Internet search engines, and barraged consumers with pop-up and other online ads. The FTC also charged that the spyware captured consumers’ personal information such as their first and last names, addresses, e-mail addresses, telephone numbers, and Internet browsing and shopping histories, and transmitted the information to the company’s servers.
Consumers were unable to locate or uninstall the spyware through reasonable means, according to the FTC.
The settlement bars Odysseus Marketing and Rines from engaging in the activities described above. It also requires Rines to obtain a $500,000 performance bond before downloading or installing software that causes the display of ads, modifies Web browsers or operating systems, or collects personal information. Also, the settlement imposes a $1.75 million judgment, of which all but $10,000 is suspended based on Rines’ inability to pay. Should the court find that the defendants misrepresented their financial condition, the entire $1.75 million will become due, the FTC said
Rines gained Internet infamy in the mid-nineties as the partner of self-proclaimed spam king Sanford Wallace. At its peak, some experts estimated that Wallace’s company, Cyber Promotions, was responsible for as much as a third of all spam on the Internet.
A New Hampshire federal court in May ordered Wallace to pay more than $4 million he allegedly obtained by downloading spyware onto consumers’ computers and duping them into buying purported anti-spyware products.
