Tech support scam scheme cost Office Depot and Support.com $35 Million

Office Depot companies and Support.com provided users with “PC Health Check” app that convinced them to buy diagnostic and repair services

Companies tricked users into buying useless services and software by showing fake malware scan results. Now the FTC demands them to pay $35 million dollars.

Office Depot and its partner Support.com agreed to pay $25 million and $10 million^[1] respectively as a part of a settlement with the U.S Federal Trade Commission. The two tech support companies were accused of tricking customers into believing that their computers are infected with malware and then charging them for fake PC repair procedures. According to the lawsuit documents, the tech support scam scheme lasted almost a decade and lured thousands of dollars from unsuspecting consumers.

Office Depot provided its customers with a diagnostics program PC Health Check that would ask them questions about computer slowness, crashes or other suspicious activities that might be interfering with the normal operation of the machine. Based on options selected, the application would show predetermined scan results that would imply malware symptoms or even the infection itself. This was when the services for the repairs were offered.

Kiro 7 reporters investigated this technical support service for extra charges by taking devices to Office Depot stores.^[2] Further investigation was held later on when on November 18, 2016, a letter from the senator Cantwell was sent to FTC.^[3]

In the settlement with the FTC, both companies agreed to pay $35 million. The money will be used to compensate the customers who were unfortunate enough to be tricked by this tech support scam:

Consumers have a hard enough time protecting their computers from malware, viruses, and other threats. 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.

Support.com and Office Depot ran a scheme that tricked thousands of users

According to the FTC report,^[4] Office Depot sold technical support services in stores and used a PC Health Check program as a sales tool to trick customers into purchasing computer repair services. The app was promoted as a free tool that could allegedly help to improve the performance of users' computer and scan for security issues related to malware.

The FTC said that the program offered to detect malware on the computer, but in reality, the provided results were solely based on the answers the customers picked at the beginning of the scan session. Those questions related to the general performance of one's device and the problems which may later be indicated as malware symptoms. When consumer answers “yes” on at least one of them, the program automatically delivers predetermined results.

As soon as the customer is presented with scan results, he or she is also offered to install software worth of hundreds of dollars as the solution to fix the computer problems. Once the user installs the suggested software, Support.com would remotely connect to the computer to fix alleged problems.

Violation of the prohibition against deceptive practices cause a significant drop of shares

Many consumers paid up to $300 for the computer diagnostic and repair tool from Office Depot and Office Max.^[5] However, user complaints about the program were known for the providers at least since 2012. Despite those concerns and warnings, this campaign continued until 2016.

After this incident Office Depot shares dropped significantly.^[6] Only hours after the Federal Trade Commission settlement Office Depot shares fell 5.1%. Both companies violated the FTC Act's prohibition against deceptive practices. The commission officially stated:

In addition to the monetary payment, the proposed settlement also prohibits Office Depot from making misrepresentations about the security or performance of a consumer’s electronic device and requires the company to ensure its existing and future software providers do not engage in such conduct. As part of its proposed settlement, Support.com cannot make, or provide others with the means to make, misrepresentations about the performance or detection of security issues on consumer electronic devices.