Office Depot and California-based tech support firm Support.com have agreed to settle for $35 million after being charged by the FTC on allegations that the companies scammed customers into spending millions of dollars on unnecessary services.
Office Depot and its software supplier that offers online technical support, Support.com, have both agreed to pay a total of $35 million in order to settle charges by the Federal Trade Commission (FTC), which has accused the two companies of tricking customers into buying costly repair services, according to the FTC.
The Commission says that the two companies have violated the FTC Act’s prohibition against deceptive practices by “claiming their software had found malware symptoms on the customers’ computers,” which prompted customers to buy millions of dollars’ worth in computer repairs and technical services.
Office Depot will pay $25 million, while the computer technology corporation will pay $10 million in settlements with the FTC, which plans to use the settlement money to refund the companies’ scammed customers.
“Consumers have a hard enough time protecting their computers from malware, viruses, and other threats,” said FTC Chairman Joe Simons, “This case should send a strong message to companies that they will face stiff consequences if they use deception to trick consumers into buying costly services they may not need.”
According to the FTC, Office Depot and Support.com had been working together for nearly ten years selling technical support services at Office Depot locations, and offering what the company marketed as a free “PC check-up,” in which customers would answer a questionnaire about whether their computers ran slow, received virus warnings, crashed, or displayed pop-up ads.
FTC alleges that Office Depot and Support.com arranged the PC check-up scan to report that it found malware symptoms or infections if a customer were to answer “yes” to at least one questions, despite situations in which customers did not actually have “malware symptoms” in the results of the computer scan.
Thus, customers were allegedly prompted to click a “view recommendation” button at the end of the scan, encouraging them to buy services that would cost hundreds of dollars. Support.com had allegedly received tens of millions of dollars in revenue working with Office Depot remotely, by completing “tech repair services” after consumers made their purchases.
FTC adds that both companies have had multiple warnings of internal concerns regarding the “PC Health Check program” since at least 2012.
“I cannot justify lying to a customer or being TRICKED into lying to them for our store to make a few extra dollars,” said one OfficeMax employee in a complaint to corporate management in 2012.
Moreover, the settlement will also require that Office Depot ensure its existing and future software providers do not make any misrepresentations about the security or performance of a consumer’s electronic device, and will forbid Support.com from providing others with the means to engage in such conduct.