U.S. Regulators Go After Pop-Up Advertiser

Nov. 7, 2003 -- In this week's Cybershake, we look at the latest move by federal regulators to stop a particularly annoying online advertising trick. Plus, we note Microsoft's latest attempt to stop hackers — with cold, hard cash.

FTC Cans a Pop-Up Spammer

Tired of pop-up advertising online? You're not the only one. In fact, U.S. regulators are finally getting into the act.

On Thursday, The Federal Trade Commission has gone to court seeking an injunction against D-Squared Solutions in San Diego. Howard Beales, director of consumer protection at the FTC, said that the cyber-marketer was using a particularly sneaky form of pop-up ads that exploited a feature in Microsoft Windows software called Messenger Service.

The function was originally designed to allow office computer managers to talk to other computer users on their network — to warn of a printer problem, for example. But unscrupulous online advertisers have discovered they can use the feature to send unsolicited commercials to anyone on the Internet.

And according to the FTC, D-Squared's ads were particularly troublesome.

"The defendants sent their messages to consumers as often as every few minutes," said Beales. "The barrage of messages caused some consumers to lose data, suffer application freezes, or crashes."

To add insult to injury, the FTC claims that the pop-up ads being pitched by D-Squared was for so-called ad-blocking software.

"What we charge is the violation here is the sending the message for no other purpose than to try to charge you to stop sending the message," said Beales. "'I'll beat you and I'll stop beating you if you pay.' We call that extortion."

Katherine McKechnie, a consumer who filed the original complaint that led to the FTC's action, couldn't agree more.

"I feel that people that are sending these messages are infringing on my rights and everyone else's rights to use their computers," said McKechnie. "They know that they're blocking the screen and the only solution apparently is to pay the $29.99 or whatever it is to buy the service that they're selling which turns off their own messages."

The FTC hopes the pending court case will reveal just how much D-Squared raked in from the ads and return the funds back to consumers.

"We're seeking restitution for consumers and disgorgement of all of the money they got," said Beales. "We don't at this point know exactly how much that is. We'll find that out in the course of the litigation."

Last month, Microsoft had warned consumers to disable the Messenger Service portion of Windows because it was a possible that hackers could use the feature to spread computer viruses. Microsoft now says future versions of the Windows operating system will be shipped with the feature turned off.

The FTC has also posted information on how to disable the Messenger Service feature. To view it, go to the FTC's Web site at:

www.ftc.gov/bcp/conline/pubs/alerts/popalrt.htm

— Andrea Smith, ABCNEWS

Calling All (Virtual) Bounty Hunters

For millions of Internet users, fast-spreading malicious computer bugs such as the MSBlaster worm and the SoBig virus are hard to forget. Both caused millions of dollars of damages and lost time to corporate and personal computer users.

"These are real crimes that disrupt the lives of real people," said Microsoft vice president, Brad Smith. And now the company wants to give computer viruses a deadly shot — of money.

On Wednesday, the software giant announced it has created a $5 million reward fund to help law enforcement official identify and convict virus writers.

Already, one-tenth of the money has already been ear-marked as bounty against those who orchestrated two of the most recent attacks.

"Microsoft is offering one reward of a quarter million dollars for information that results in the arrest and conviction of those responsible for launching the MSBlaster.A worm," said Smith. The other $250,000 will go toward the capture and conviction of the masterminds behind the SoBig attack.

"This reward program is offered globally, to residents of every country, in accordance with local laws," said Smith. In other words: Virus makers beware. There's a global price on your heads.

— Larry Jacobs, ABCNEWS

Cybershake is produced for ABCNEWS Radio by Andrea J. Smith.