Indian tech firm iYogi sued in US for 'unfair and deceptive' business practices

"Hundreds, perhaps thousands, of Washingtonians scammed up to $540 each," Washington State AG said.

iYogi, a technology support firm run by Indian-American Vishal Dhar, is facing a lawsuit from Washington State for "unfair and deceptive business practices that violate Washington's Consumer Protection Act."

In a statement, Attorney General Bob Ferguson said the lawsuit against one of the biggest independent tech support providers in the world, iYogi, and its President, Vishal Dhar, was "to stop a scam that uses deception and scare tactics to pressure consumers into buying unnecessary tech support services."

New York-based iYogi has 5,000 employees and has call centers in India, claiming to serve over 3 million customers in 11 countries. It provides subscription-based remote support for personal technological devices such as computers and tablets, said the statement.

The state may seek up to $2,000 in civil penalties for each violation of the Consumer Protection Act and $100,000 per violation of the Computer Spyware Act. The number of victims are estimated to be in thousands and will be identified during the lawsuit, according to the statement.

The lawsuit, filed in King County Superior Court, also alleges that iYogi, as part of its ploy to coerce them into buying tech support services, induced consumers to install unnecessary software, in violation of Washington's Computer Spyware Act.

Nationwide, an estimated 3.3 million Americans suffer $1.5 billion in annual losses from tech support scams, according to the 16 December statement issued by the office of Attotney General Bob Ferguson.

Modus operandi

The statement states the AG's investigation revealed the tactics deployed by iYogi to sell "unneeded tech support services" to consumers, as listed below:

In online ads, iYogi associates itself with major technology companies such as Microsoft, Apple and HP. When consumers call iYogi, the representative claims to provide tech support services on behalf of whatever company the consumer inquires about.
After gaining remote access to the consumer's computer, iYogi identifies benign but complex-looking files and claims the "infected files" harm the computer. iYogi misleads the consumer into believing he or she must download iYogi's diagnostic software to fully identify the computer problems.
iYogi then produces a diagnostic report on the consumer's screen and claims there is malware or other serious defects. iYogi misrepresents the report by telling the consumer these infected files are harming the computer, when in fact the identified items are often routine programs that pose no threat.
Once iYogi has alarmed the consumer, the representative proceeds to aggressively sell a tech support plan to fix the non-existent problems â€” 1 year for $140 or 5 years for $379. iYogi claims the plans cover tech support needs for the length of the contract.
iYogi also informs the consumer the computer doesn't have antivirus software and tries to sell the consumer iYogi's antivirus software for up to $80, even if an existing antivirus is already installed.
iYogi also states the consumer needs to update to the Windows 10 operating system, or the computer will be harmed, which it will not. iYogi uses this scare tactic to coerce the consumer into buying Windows 10 for $80, even though Microsoft offers the upgrade for free. The AGO investigation confirmed that iYogi identified such "problems" even on a computer with a newly installed operating system.