FTC shuts down $450m internet retail scam

The US Federal Trade Commission (FTC) has seized the assets of a man accused of running a series of online scams worth an estimated $450m (£292m).

The FTC believes that Jesse Willms was behind 10 companies that took advantage of hidden charge clauses to defraud people on items ranging from pharmaceuticals to dietary supplements and personal care products.

Willms allegedly offered free trials for a number of items with hidden 'negative option' charges. People who thought they were signing up for the free trial were then charged an $80 monthly fee which had to be opted out of.

The FTC has also filed charges against two other individuals believed to have taken part in the operation.

"Not only has the FTC shown a likelihood that defendants have engaged in misleading marketing practices, but it has shown that defendants have moved substantial funds to offshore companies and bank accounts," said a US Federal Court statement.

Security firms and government regulators are having to deal with increasingly diverse and sophisticated online scams. In recent months, enterprising criminals have used tactics such as Skype calls and fake student loan documents to lure victims.

In a separate case, Microsoft confirmed that it has terminated its relationship with one-time partner CoMantra. The firm had been accused of operating a number of security software scams in which CoMantra employees attempted to sell products while posing as Microsoft agents.

"We expect members of the Microsoft Partner Network to adhere to our terms and conditions," a Microsoft spokesperson told V3.

"Those who are suspected of not doing so will be investigated and, if found to be in violation, Microsoft will terminate the relationship."