Introducing Extortion-Ware

I’m not sure how many unsuspecting people have run into this “wonderful” software, but I did while trying to stop annoying adware problems on my friend’s PC. He would randomly get a pop-up stating: “Your free trial of Popcorn.net is over, click here to purchase.” So, in an attempt to help out, the first thing I did was go to Add/Remove Programs in the Control Panel, and lo and behold, I couldn’t remove the app.

I did a little research on this program, which supposedly lets you watch movies online, and here’s where it gets interesting: I found that the EULA says you consent to the program updating itself automatically and that the company may demand money from you to remove the app because you consented to it being installed. Furthermore, the program says you pretty much have to pay the company if you don’t cancel the “trial subscription” within the time period it sets. You can find info about how to remove the program from this website: www.schrockinnovations.com/removepopcorn.php. Is this even legal?
— Keith Gajeski

You’ve run into a new flavor of malware that’s been labeled “extortionware,” or “strongarmware.” In the case of Popcorn.net, aka Movieland.com, the company claims that the app is installed only after you’ve read a long EULA and clicked OK to install it, but there are numerous allegations on the Internet that the app is installed via surreptitious drive-by web-browsing methods. Whichever way it gets installed, the outcome is the same when the trial period expires: pop-ups galore that demand you pay $29.95 to remove them. Illegal? No way, the company claims; you agreed to a contract when you installed the software. When consumers contacted Movieland.com to complain, they were told: “It is impossible for this software to exist on your system without a user actively following a four-step installation process.”

But what if someone else installed it on your machine? The company says: “We understand that multiple users may access a single computer. However, the machine’s owner is solely responsible for regulating access to the computer. As such, it’s your responsibility to satisfy the contract entered into by way of your machine and your IP address. Failure to satisfy your payment obligation may result in an escalation of collection proceedings that could have an adverse effect on your credit status.”

Employing methods akin to a Sony rootkit or malware, the application makes it nearly impossible for users to uninstall it, and most users were unable to prevent the app from generating full-screen pop-ups. “Customer support” refers consumers to a 900 number that charges $34.95 an hour. And even folks who fix the pop-up problem might still have the software resident on their machine. It all sounds pretty fishy to the Dog. And to the authorities too, apparently. The Federal Trade Commission and the Washington state Attorney General have sued Popcorn.net, Movieland.com, Digital Enterprises, and a dozen other names the company operates under for allegedly violating the FTC Act, which governs trade practices.

The FTC’s suit says many consumers did not consent to having the pop-ups and that a PC’s owner is not obligated to pay any contracts that other people entered into while on the computer. The FTC suit also names Easton Herd and Andrew M. Garroni of Los Angeles in the suit. The Dog was unable to reach Herd, Garroni, or Popcorn.net for comments.

The state of Washington is also taking action against Herd, Garroni, and Popcorn.net for allegedly violating the state’s Computer Spyware Act, which prohibits hijacking a person’s computer, changing security settings, and preventing users from removing spyware. The state said both Herd and Garroni could be fined $100,000 per violation of state law and $2,000 under the Consumer Protection Act.

Movieland.com and Popcorn.net might also be the target of a class-action suit that alleges the
company is violating California’s consumer protection laws. The firm of Manuel H. Miller said it plans to sue Popcorn.net to recoup consumers’ losses. “[The Popcorn.net software] is really one of the nastiest things I’ve ever seen,” said Jeff Schwartz, a spokesman for the firm, who said his own father was a victim. Schwartz said readers who want more information on the planned suit can visit www.manuelhmiller.com for more information.

From our Holiday 2006 Watchdog column