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Class Claims Symantec Uses ‘Scareware’

SAN JOSE (CN) - Security software giant Symantec uses "scareware" to trick customers into buying its anti-virus programs, a class action claims in Federal Court.

Lead plaintiff James Gross claims: "Through a common deceptive scheme, Symantec uniformly defrauds consumers into purchasing the three products at issue in this lawsuit - PC Tools Registry Mechanic, PC Tools Performance Toolkit, and Norton Utilities (hereafter collectively referred to as the 'Scareware').

"First, Symantec represents to the consumer that the Scareware is capable of identifying and fixing a wide range of PC errors, privacy threats, and other computer problems. Next, to demonstrate the Scareware's value to the consumer, Symantec allows the user to download the software and perform a 'free diagnostic' scan, which purportedly detects whether any such problems exist on the individual's PC. Then, the Scareware reports, in alarmist fashion, that harmful errors and other threats exist on the user's PC. Finally, Symantec informs the consumer that a handful of these issues may be fixed for free, but the individual must purchase the product to fully remove the remaining so-called errors."

But, Gross says, "the Scareware does not conduct any actual diagnostic testing on the computer. Instead, Symantec intentionally designed its Scareware to invariably report, in an extremely ominous manner, that harmful errors, privacy risks, and other computer problems exist on the user's PC, regardless of the real condition of the consumer's computer. Furthermore, the Scareware does not, and cannot, provide the benefits promised by Symantec. Accordingly, consumers are duped into purchasing software that does not function as advertised, and in fact, has very little (if any) utility."

Gross claims: "Once the Scareware's scan is complete, the user is presented with its results in an extremely menacing fashion. For example, the displayed lettering is red and bolded, the screen contains warnings that errors need immediate repair, or that they are slowing down the computer, or exposing the user's privacy. Next, the Scareware offers to 'fix' some of the detected errors, but requires the user to purchase the full, registered version, of the software to fully 'fix' the identified computer problems.

"The truth, however, is that the Scareware does not actually perform any meaningful evaluation of the user's computer system, or of the supposed 'errors' detected by the software. Moreover, the Scareware does not, and cannot, actually perform the valuable tasks represented by Symantec through its websites, advertising, and in-software display screens."

Gross claims that "Symantec's Scareware always reports that the computer's 'System Health' is 'LOW,' that 'High Priority' errors exist on the system, and that the user's 'Privacy Health' and 'Disk Health' are 'LOW.' ... Worse, plaintiff's experts revealed that, by any stretch of the imagination, the errors detected as 'High Priority' are not credible threats to a computer's functionality."

Gross claims that Symantec routinely conducts research to fish out fraudulent anti-virus software and, "in what can only be described as supreme irony, or a clever attempt by defendant to persuade consumers to choose its own 'legitimate' computer utility software, the results of Symantec's research succinctly capture the fraud at issue in this lawsuit: 'Once installed on a user's computer - and to induce payment - rogue security applications often misrepresent the computer's security status or performance, displaying fake or exaggerated claims of threats.'"

He adds: "Symantec holds itself out as a reputable industry leader in developing software aimed to protect consumers' computers. Because average consumers lack the requisite technical expertise to understand the underlying functionality of Symantec's software, they trust Symantec to convey truthful information, and to honestly and accurately identify and remove harmful errors from their computers. Symantec betrayed that trust, and as a result, millions of consumers have been, and continue to be, tricked into paying for its unlawful Scareware. Due to the level of egregious, willful acts of fraud committed by Symantec, plaintiff seeks punitive damages."

In a company news release, Symantec reported revenue of $6 billion in fiscal year 2010, and an operating margin of 28.6 percent.

Gross seeks punitive damages for the class, for unfair competition, breach of warranty, fraud and unjust enrichment.

He is represented by Sean Reis with Edelson McGuire, of Santa Margarita.

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