Additional Information for Office Depot, Inc.

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On March 27, 2019, FTC Case # 9:19-cv-80431

According to the FTC's complaint, Office Depot, Inc. and a California-based tech support software provider have agreed to pay a total of $35 million to settle Federal Trade Commission allegations that the companies tricked customers into buying millions of dollars' worth of computer repair and technical services by deceptively claiming their software had found malware symptoms on the customers' computers.

Office Depot has agreed to pay $25 million while its software supplier, Support.com, Inc., has agreed to pay $10 million as part of their settlements with the FTC. The FTC intends to use these funds to provide refunds to consumers.

Checking any of the four boxes triggered a deceptive report of malware on the consumer's computer.In its complaint, the FTC alleges that Support.com worked with Office Depot for nearly a decade to sell technical support services at its stores. Office Depot and Support.com used PC Health Check, a software program, as a sales tool to convince consumers to purchase tech repair services from Office Depot and OfficeMax, Inc., which merged in 2013.

The Office Depot companies marketed the program as a free "PC check-up" or tune-up service to help improve a computer's performance and scan for viruses and other security threats. Support.com, which received tens of millions of dollars in revenue from Office Depot, remotely performed the tech repair services once consumers made the purchase.

The FTC alleges that while Office Depot claimed the program detected malware symptoms on consumers' computers, the actual results presented to consumers were based entirely on whether consumers answered "yes" to four questions they were asked at the beginning of the PC Health Check program. These included questions about whether the computer ran slow, received virus warnings, crashed often, or displayed pop-up ads or other problems that prevented the user from browsing the Internet.

The complaint alleges that Office Depot and Support.com configured the PC Health Check Program to report that the scan found malware symptoms or infections whenever consumers answered yes to at least one of these four questions, despite the fact that the scan had no connection to the "malware symptoms" results. After displaying the results of the scan, the program also displayed a "view recommendation" button with a detailed description of the tech services consumers were encouraged to purchase--services that could cost hundreds of dollars--to fix the problems.

The FTC alleges that both Office Depot and Support.com have been aware of concerns and generally about the PC Health Check program since at least 2012. For example, one OfficeMax employee complained to corporate management in 2012, saying "I cannot justify lying to a customer or being TRICKED into lying to them for our store to make a few extra dollars." Despite this and other internal warnings, Office Depot continued until late 2016 to advertise and use the PC Health Check program and pushed its store managers and employees to generate sales from the program, according to the complaint.

The Commission alleges that both companies violated the FTC Act's prohibition against deceptive practices. Office Depot has agreed to pay $25 million while its software supplier, Support.com, Inc., has agreed to pay $10 million as part of their settlements with the FTC. The FTC intends to use these funds to provide refunds to consumers.

In addition to the monetary payment, the proposed settlement also prohibits Office Depot from making misrepresentations about the security or performance of a consumer's electronic device and requires the company to ensure its existing and future software providers do not engage in such conduct. As part of its proposed settlement, Support.com cannot make, or provide others with the means to make, misrepresentations about the performance or detection of security issues on consumer electronic devices.

For further assistance:
Headquarters Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: (202) 326-2222
www.ftc.gov

Link:
https://www.ftc.gov/news-events/press-releases/2019/03/office-depot-tech-support-firm-will-pay-35-million-settle-ftc

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On November 13, 2019, Washington State Attorney General Bob Ferguson announced today that national office supply retailer Office Depot will pay $900,000 to resolve the attorney general's investigation into its deceptive computer repair sales practices.

Until late 2016, Office Depot used variations of "PC Health Check," a software program that led consumers to purchase diagnosis and repair services costing up to $200 regardless of whether their computer was actually infected with viruses or malware.

As part of the legally binding agreement with Washington, which the Attorney General's Office filed today in King County Superior Court, Office Depot is prohibited from using deceptive programs to sell repair services and must conduct reviews of its software providers to ensure the software is not engaging in deceptive conduct.

Washington is the only state to garner an agreement in addition to a $35 million national settlement with the Federal Trade Commission (FTC) for similar conduct. That FTC settlement will provide restitution for impacted consumers. The FTC and Attorney General's Office were alerted to Office Depot's deceptive computer repair sales practices by news reports from KIRO TV consumer advocate Jesse Jones.

At the beginning of the PC Health Check service, an Office Depot employee asked the customer four questions about whether the customer's computer had slowed down, experienced frequent pop-ups, received virus warnings or frequently crashed. They then entered the responses into the PC Health Check program. Once the questions were answered, the software conducted a simple scan of the computer.

However, regardless of whether a virus or malware existed on the computer, PC Health Check always reported "malware symptoms found" or the "scan has identified potential malware related symptoms" if the consumer answered "yes" to any of the four pre-scan questions.

When the PC Health Check software "uncovered" malware or a virus, the employee would recommend a diagnosis and repair service to remove it, typically costing between $150 and $200.

In 2012, an Office Depot employee notified management that the software reported malware symptoms on a computer that "didn't have anything wrong with it."

Despite this knowledge, from 2012 to 2016, Office Depot sold these repair services to an estimated 14,000 Washington customers.

As part of a separate settlement with the FTC for the same conduct, Office Depot and its software vendor, Support.com, will also pay $35 million to the FTC, which will be used for nationwide consumer restitution. More information on the FTC settlement and the agency's pending plans to return money to impacted customers is available here.

Attorney General Ferguson will set aside the $900,000 until the FTC concludes its process for providing restitution to individuals harmed by Office Depot's unfair and deceptive conduct. If the number of consumers filing claims results in less than full restitution for Washington consumers, the Attorney General's Office will use its payment to provide additional funds to Washingtonians with the goal of making them whole. Otherwise, today's resolution with Washington will be used to recoup the costs of bringing the investigation and lawsuit, and fund the ongoing consumer protection work of the Attorney General's Office.

For More information please contact:
Washington State Office of the Attorney General
1125 Washington St SE
Olympia, WA 98504
(360) 753-6200

Link: https://mailchi.mp/atg/ag-ferguson-office-depot-will-pay-900000-over-deceptive-virus-screening?e=3af8f1e248