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Spyware Settlement Reached In Washington
by Michael Martinez
Washington's top cop this week announced a settlement with one of the Internet affiliate advertisers he has sued for violating the state's law against secretly-installed malicious computer programs.
State Attorney General Rob McKenna said HoanVinh Nguyenphuoc, the owner of the firm FixWinReg, will pay to settle charges that his company sent consumers unsolicited e-mails baiting them to install deceptive spyware applications.
McKenna announced lawsuits earlier this year against FixWinReg, NJC Softwares and Secure Links Networks. He accused the companies in state superior court of working with each other to fraudulently market each other's products. Civil charges against the other two firms and their chief executives are still pending.
According to investigators in McKenna's office, e-mails sent by Nguyenphuoc misled consumers into believing that their computers had become infected with malicious software. The alleged fraudulent warnings directed users to download free registry scanning and cleaning programs that also changed the users' Internet browser settings and transmitted bundled software.
In a statement, Assistant Attorney General Katherine Tassi said the free scans always identified critical system errors that consumers were urged to fix, at a price, with the full version of the registry cleaning applications.
"Based on the defendants' deceptive marketing, hundreds of Washington consumers paid $29.95 or more to remove files from their computer that in some cases were harmless," Tassi said.
Nguyenphuoc has agreed to pay $75,000 in civil penalties and $25,000 in attorney fees. His company will pay additional penalties if it violates the terms of the settlement that prohibit it from using fraudulent messages to promote its products.
It is the fifth case McKenna has pursued under Washington's anti-spyware law, which went into effect two years ago. The statute prohibits companies from transmitting software or modifying the personal settings of a consumer's computer without that person's express consent. The New York-based firm Secure Computer last year agreed to pay $1 million to settle charges that it violated the state's rules against spyware.
McKenna said he and his staff have "repeatedly proven" that they will hold companies committing online crimes accountable and that this recent case demonstrates that such firms are "within reach" of law enforcers.
"Internet advertisers must follow the same rules which apply to businesses that promote their products through TV, radio or print," he said. "They must be truthful about any claims concerning a product's cost or performance. Inducing a computer user to download software by falsely claiming the program is necessary for security purposes is unethical and illegal."
Audit Blasts San Francisco's Information Technology System
Auditors in San Francisco this week said that the city's information technology system is in shambles.
The San Francisco Chronicle reported the Board of Supervisor's budget analyst this week told city officials that they have wasted millions of dollars on IT projects that are woefully behind schedule. Budget Analyst Harvey Rose said the city's lack of central oversight in information technology is largely responsible for the wasteful spending.
The audit also found that the city's computer networks are vulnerable to hackers and that only 14 of its 55 departments have data security policies in place.
A technology committee created by the Board of Supervisors 10 years ago has been meeting on a monthly basis. That panel was largely inactive from 2003 to 2006. Rose recommended that the city implement immediate measures to streamline the procurement of technology services that is currently carried out by individual departments. He also said it is imperative for the city to establish new security procedures.
Supervisor Tom Ammiano, the official who ordered the review, told the Chronicle that the audit's findings were devastating and that there does not appear to be anyone in charge of the city's IT efforts.
An executive directive issued by Mayor Gavin Newsom this week called on the city's chief technology officer to begin work on a long-range technology plan. The directive also calls for the board's Committee on Information Technology to assume the responsibility of crafting citywide technology policies.
The audit spoiled an otherwise bright week for San Francisco on the technology front. Newsom cheerily announced this week that the Wikimedia Foundation, the body behind a popular online encyclopedia anyone can edit, will shift its headquarters later this year from Florida to the Bay Area. Newsom said in a news release that the move would "contribute greatly to the atmosphere of creativity that flourishes" in his city.
Kentucky School Attendance System Is Faulty, Report Says
Holes in the system used by Kentucky education officials to collect attendance data from individual school districts could have a significant impact on the Bluegrass State's budget, according to a new report.
The Kentucky State Auditors Office this week found the accuracy of the state's attendance reporting system needs to be improved immediately. Auditors concluded that some errors in the information system can go undetected for years, affecting budgetary decisions made by education officials and lawmakers who rely on the data.
State Auditor Crit Luallen recommended that education officials re-evaluate the access controls to the data systems in each school district. In a statement, she said it is an urgent matter because the state General Assembly makes funding decisions based on daily attendance statistics in individual school districts.
"These attendance audits affect billions of dollars in education spending," she said. "It is critical that our citizens have confidence that this money is spent where it is needed."
University Moves To Shut Down Gambling Site
A public university in Massachusetts this week said it may go to court to force students to shut down a gambling site that has been using the school's logo.
AP reported this week that the University of Massachusetts at Amherst said it will send cease and desist letters to the operators of an online poker operation linked to current and former students. The site, UMasspoker.com, features the school's lettering and athletic logo.
University spokesman Ed Blaguszewski told AP that the name and logo are university property and that they cannot be used without permission. He said the school does not consider a gambling site to be an appropriate use.
Brett Burdick, an alum who said he has been moderating the site for the past year, said no one from the school ever told him what he was doing was illegal. The site features information about poker strategy and various cash tournaments in the area.
Blaguszewski said the school will go to court to shut down the site if its operators do not comply with the letters.
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