Click4Support: The FTC, Pennsylvania and Connecticut v. a $17 Million Tech Support Call Center

The bottom line: ads that impersonate a brand to generate calls, followed by a scripted false diagnosis, are deceptive telemarketing, and payment helpers can be liable as well.

Here is what happened

The complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania (case no. 2:15-cv-05777-SD). According to the plaintiffs:

• The defendants used internet ads, including search engine ads, and popups that appeared to be from well-known tech companies to get consumers to call.
• Callers were routed to the defendants' call center, where telemarketers often claimed to be "a Microsoft agent," "Google support" or to "work with AT&T."
• Telemarketers got remote access and navigated to harmless areas, such as the Windows Event Viewer, to convince consumers their computers were infected.
• Consumers were pressured into support plans and repairs often costing hundreds and sometimes thousands of dollars.
• Some "technicians" made changes that could potentially harm the computer.

The court issued a preliminary injunction with an asset freeze.

In May 2016, the FTC amended its complaint to add three defendants, Innovazion Research Private Limited, Abhishek Gagneja and Rishi Gagneja, and new Telemarketing Sales Rule (TSR) charges. The amended complaint alleged credit card laundering, and that certain defendants processed card payments, handled chargebacks and opened bank accounts for others while knowing they were engaged in illegal telemarketing.

Read the FTC, Pennsylvania and Connecticut complaint against Click4Support.

The result

1. May 2017. As part of Operation Tech Trap, the plaintiffs announced settlements with most of the defendants. They are banned from marketing technical support services, agreed to pay more than $554,000 in total and forfeited $1.3 million held by the receiver.
2. Default judgment. The court entered a default judgment of more than $27 million against iSource USA LLC, which did not respond.
3. January 2018. The court agreed that the receivership money was acquired "through fraud and other improper means" and should go to victims.
4. February 2020. The FTC began sending 57,960 refunds averaging about $30 each, totaling more than $1.7 million.

"We're pleased the court shut down these scammers, who defrauded consumers out of millions of dollars by preying on their lack of technical expertise," said Jessica Rich, then Director of the FTC's Bureau of Consumer Protection.

The law in plain English

The TSR prohibits misrepresenting a seller's affiliation with another company and misrepresenting the nature of the services sold. It also prohibits credit card laundering, which means processing charges through a merchant account that is not the seller's own. Its exemptions for inbound calls from ads and direct mail do not cover tech support since a 2024 amendment.

What this means for you

1. Do not run ads that look like they come from a brand you do not represent.
2. Never tell a caller a computer is infected based on harmless system logs.
3. Process payments only through your own merchant account.
4. If you handle a call center's payments or chargebacks, know what it sells.