March 22, 2010
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Know Your Scareware, Pt.4
An empire falls.Federal investigators depend on banks and credit card companies to provide valuable data pertaining to customer complaints and transaction disputes. This data helps investigators trace high volume complaints back to organizations where they look to determine the reasons behind disgruntled credit card users. Innovative Marketing had an unusually high amount of complaints which also interfered with their relationship with their bank. The company's banks in Canada eventually severed its business relationship with it. It wasn't enough to stop them, Innovative created several bogus subsidiaries and took their business to Bahrain. After having received the highest number of credit card chargebacks, the Bahrain bank also ended their relationship with Innovative.
It took Innovative five months to find another credit card processor after being dumped by Bahrain all the while holding on to millions of dollars of card payments. The new bank in Singapore processed every one of the back logged transactions. At that time, the company stepped up its investment in its call centers in order to convince the credit card customers to back down on its demands for a refund. Call center employees did what ever necessary to walk the victims through the steps which they said would eliminate the problem. Of course, the problem didn't go away leaving the customer thinking they were doing something wrong and eventually just taking their computer to a repair service company. The end result, the hard drives were wiped clean and the operating system re-installed. The company was able to significantly reduce complaints.
It has been difficult for the authorities in fighting the scareware cybercriminals. Most operate in countries where the absence of laws allows criminals to conduct identity theft and credit card fraud related activities. Those countries that are involved in fighting internet crime include the United States, Western Europe, Japan and Singapore. A Federal Judge ordered Innovative to pay $163 million restitution; however, the entities have gone into hiding. The case of Innovative Marketing represents the need for all consumers to be extra cautious when purchasing antivirus and security software. The FTC's advice is to stick to a well known and reliable brand like Norton and McAfee.