Christopher Boyd at FaceTime Security Labs Blog gives the play-by-play of following an ad appearing on a comics website promising a free online batman game. What it leads to, though, is an demo of a 7-year-old game, a lot of lies along the way, and some Zango adware for your efforts. The website it comes from is registered anonymously—i.e., not to DC Comics or Warners Brothers—and is devoid of any licensing information from WB whatsoever.

Zango would probably say this is the work of an affiliate and not them, and if something like this happened just one time we might believe them. Fact is, it’s happened time and time again. Zango was fined $3 million by the FTC in 2006 for secretly installing adware and making it impossible to remove.

Stipulations in that settlement were subsequently ignored, and trouble popped up at Warner Brothers site when it became obvious that downloading Zango games could expose kids to porno ads (WB subsequently removed their Zango association), and again later via a Facebook application purporting “secret crushes” to members, who only got adware junk instead.

This pattern of paying regulatory fines but continuing with shady behavior isn’t limited to Zango. Recently we reported the connection between “social network” Tagged.com founder and his former company Jumpstart, which was fined by the FTC in 2006 for violations of the CAN-SPAM Act. And yet, Tagged continues to dupe people into giving them access to their entire email inbox.

There’s a reason insider traders like Martha Stewart (first and most famous one that comes to mind) are sent to jail for insider trading. Used to be they were fined for shady business practices, but they kept doing it because the fine was just worked in to their business expenses and judged against profit. Jail time became necessary.

Obviously, the FTC fines aren’t working on companies like Zango. 
 

But also, with scammers like this out there in cyber space it makes it really difficult for legitimate advertisers trying to get people to click on their special offers. If the consumer is conditioned to distrust all banners, no wonder they won’t click on them!
 

Ben Edelman, a professor at Harvard Business School and certainly no fan of Zango (formerly 180solutions), has gathered evidence suggesting Zango is willingly and openly violating the terms of the FTC settlement.

On his blog, he presents his case:

Among these practices are widespread, ongoing Zango-designed installation sequences which install Zango pop-up ad software without any on-screen disclosure of material terms. Instead, these installations mention Zango’s effects only in a lengthy EULA – exactly contrary to the FTC settlement’s requirements.

Zango’s ongoing practices also include widespread in-toolbar ads without the labeling and hyperlinks specifically required under the FTC settlement. Other Zango ads, including desktop icons and even certain pop-ups, also lack these labels and links.

Perhaps the company filed the FTC fine under "Business Expenses."

Edelman presents a thorough (read: lengthy) investigation, complete with screenshots. In a summary, Edelman cites ActiveX installations, banner-based installations, both without proper disclosure, unlabeled ads, toolbars, desktop icons and pop-ups, and ads for bogus sites with the intent to defraud users. 

Zango’s most recent previous news appearance occurred in July, when angry users noted that a Warner Brothers children’s site displayed a Zango icon inviting kids to download games. The games came with adware that potentially would show adult content, depending on user surfing habits.

Blogger Chet Faliszek broke that story, which led to Warner Brothers severing ties with Zango. Faliszek urged readers to file complaints with the FTC, which, apparently, happened.

The FTC subsequently accused Zango of using third parties to install adware via programs like Zango Search Assistant, 180Search Assistant, Seekmo, and n-Case, that monitored consumers’ Internet use in order to serve up targeted popup advertising. The FTC says that adware was installed over 70 million times, displaying over 6.9 billion ads.

Zango distributors often offered free software, such as screensavers, p2p software, games, and utilities without disclosure that adware came with the software. Distributors also conducted “drive-by” downloads, exploiting vulnerabilities in Web browsers to install behavior-monitoring adware without the users knowledge.

If that weren’t enough (and at this point it seems $3 million is a little light), the FTC said Zango deliberately made it difficult to identify, locate, and remove the adware once it was installed.

The company did not label popups ads to show where they came from, gave files names resembling core systems software, provided uninstall tools that would not uninstall the adware, gave those bogus uninstall tools confusing labels, and installed code on consumers’ computers that secretly reinstalled the software if the user tried to remove it.

“Consumers’ computers belong to them, and they shouldn’t have to accept any content they don’t want,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “If consumers choose to receive pop-up ads, so be it. But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use.”

Zango executives shifted the blame to the company’s affiliates, who it seems won’t be participating in the check-writing.

“Early in our business, and as we’ve acknowledged, we relied too heavily on our affiliates to enforce our consumer notice and consent policies. Unfortunately, this allowed deceptive third parties to exploit our system to the detriment of consumers, our advertisers and our publishing partners. We deeply regret and apologize for the resulting negative impact,” said Keith Smith, CEO of Zango.

Zango stated that the current stipulations mandated by the FTC have been in practice since January 1, 2006. Security research Ben Edelman begs to differ, according to Wired.com, and VitalSecurity.org has screenshots and explanations of blue-screen madness inflicted by Zango.

Tag:

Add to Del.icio.us | Digg | Reddit | Furl

Bookmark WebProNews:

Scooby and Fred Flintstone aren’t the only welcoming features on Warner Brothers’ fun stuff webpage, which lets visitors know in large block Wonder Woman letters that it’s “just for kids.” Just above and to the right of the scrolling “V for Vendetta” sweepstakes (wait, isn’t that movie rated R?), you’ll see that the page is sponsored by Zango Games.

Zango is already making people angry elsewhere over their adware affiliates. The love child formed of adware and (alleged) child porn browser distributor 180 Solutions and Hotbar, Zango offers hundreds of free games through downloading the Zango Search Assistant. Clicking on the Zango Games icon in the top right corner of the Warner Brothers webpage leads the visitor to the download screen.

The page promotes games like “Bubble Burst,” biblical-sounding “The Walls of Jericho,” and “Jade Shadow.” All that’s only important if you want to make a case that these pages and the downloads offered are targeted toward kids, which they are.

The kicker is in the End User License Agreement (EULA). Above the EULA, a box confirming that the downloader is 18 is pre-checked (i.e., it’s clicked for you). In the EULA, which is probably read about as much as the box is unchecked, the language reveals something peculiar.

Zango tells the user that certain keywords used while using the Search Assistant will deliver porn. One has to wonder if those words include “breast cancer” or “sex education.”

“So you are a parent,” writes Chet Faliszek, who pointed us to the problem. “You monitor your kids on the web. You let them go to the WB so they can check out one of the WB’s cartoons. And what do you get? Pop-up ads and porn ads!”

One commentator on Faliszek’s blog mentions that the pre-checked box can be unchecked and a user can still download the software. Faliszek advisers concerned parents and citizens to file a complaint with the Federal Trade Commission and call their representatives.

Or give Alberto Gonzales a call. He was quite happy with the misleading hyperlink and domain law passed this week, which imposes criminal penalties on persons intending to trick children into looking at porn.

Discuss this article with your fellow WebPros at WebProWorld.
—
Tag:

Add to Del.icio.us | Digg | Yahoo! My Web | Furl

Bookmark WebProNews: