US state accuses tech support firm of scamming users

The firm is alleged to offer tech support on behalf of Microsoft, something the tech giant denies

One of the world's largest independent tech support firms has been accused of routinely pressuring customers into buying software they do not need.

In a Washington State lawsuit, Indian firm iYogi is accused of using scare tactics to mislead consumers.

It is also accused of falsely claiming affiliation to Microsoft, Apple and HP.

The firm has denied the allegations, describing them as "false" and "baseless".

"While we are yet to receive the complaint through formal channels, based on our assessment of media reports we would like to firmly state that the allegations are false or baseless," said iYogi's co-founder Vishal Dhar in a statement to the BBC.

"We recognise that tech support frauds are a real issue in the US and, as a responsible industry leader, we have been working with authorities... to counter the issue."

He said that his firm would "do what is necessary" to see the case through "to its rightful end".

Attorney General Bob Ferguson alleged that "hundreds, if not thousands" of Washington residents had been affected by what he described as iYogi's "unfair and deceptive" tactics, which he claimed violated Washington's consumer protection and computer spyware laws.

He is seeking $2,000 (£1,340) in civil penalties for each violation of the Consumer Protection Act and $100,000 per violation for the Computer Spyware Act.

Microsoft's chief legal officer Brad Smith attended a news conference announcing the lawsuit and applauded the state for its efforts to "protect consumers from tech support scams that have reached epidemic levels in recent years".

He said that his firm had received more than 180,000 customer calls regarding tech support fraud.

'Vulnerable' targets

Microsoft estimates that 3.3 million Americans lose about $1.5bn annually from tech support scams.

Such scams tended to disproportionately affect "the most vulnerable segments of our society", he said, adding that tech support scams "have become a scourge on the internet".

iYogi has more than 5,000 employees based at call centres in India. It says it serves more than three million customers across 11 countries.

As part of its investigation the Attorney General's Office (AGO) alleged that iYogi used the following tactics:

• In online ads it associated itself with major technology companies including Microsoft, Apple and HP, claiming to provide tech support services on their behalf

• It gained remote access to consumers' computers and identified complex-looking files, which it claimed were infected and could cause harm. It then encouraged consumers to download its diagnostic software to identify further computer problems

• It created reports that claim that there is malware or other serious defects when in fact the identified items were often routine programs that posed no threat

• It offered unnecessary tech support plans that could cost about $140 per year

• It attempted to sell consumers anti-virus software even if they already had some installed

• It offered to update PCs to the Windows 10 operating system, which it sold for $80, even though Microsoft offers the upgrade for free

The AGO also offered advice to avoid tech support scams:

• Never give control of your computer to a third party unless you can confirm it is legitimate

• Ask if there is a fee or subscription association with the service, and if there is, hang up

• Do not provide social security numbers, banking, credit card or other financial information

• Protect personal computers with legitimate and updated security software

iYogi was earlier this year praised by US politicians when it set up a global centre in Maine, employing 300 people.

At the time, Maine Governor Paul R LePage said that it was "encouraging" that iYogi was outsourcing jobs to America.