FTC Settles Charges with App Maker

An Ohio maker of smartphone apps has agreed to settle charges by the Federal Trade Commission (FTC) and the New Jersey attorney general that it lured consumers into downloading a rewards app that turned out to be malicious.

The company, whose app is called Prized, had promised consumers the app would be free of malware. But in fact, the main purpose of the app was to load the consumersEU mobile phones with malicious software to mine virtual currencies for the developer.

The defendants, Equiliv Investments and Ryan Ramminger, began making the Prized app around February 2014 in outlets including the Google Play Store and Amazon App Store. According to the FTC, thousands of consumers downloaded the app under the impression that they could earn points for playing games or downloading affiliated apps and then spend those points on rewards such as clothes, gift cards and other items. Consumers were also promised that the app would not contain malware or viruses.

What consumers got instead, was an app that contained malware that took control of the deviceEUs computing resources to mine for virtual currencies including DogeCoin, LiteCoin and QuarkCoin, according to the complaint.

Exploiting Hardware

How did they do it? According to the FTC, virtual currencies are created by solving complex mathematical equations, and the malicious app attempted to harness the power of many usersEU devices to solve the equations more quickly, thus generating virtual currency. The use of that power also caused the devices' batteries to drain faster and recharge more slowly, and to burn through consumersEU monthly data plans.

The defendants agreed to a settlement that will permanently ban them from creating and distributing malicious software. "Hijacking consumersEU mobile devices with malware to mine virtual currency isnEUt just deplorable; itEUs also illegal," stated Jessica Rich, director of the FTCEUs Bureau of Consumer Protection.


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