The fake antivirus software industry makes underhand firms hundreds of millions of dollars in revenues. Researchers at the University of California at Santa Barbara (UCSB) studied back-end servers containing fake software samples, databases of installations, purchases, refunds and technical support conversations dating from March 2008 through to August 2010.
The research performed by UCSB, which is probably the first study of its kind, discovered less than 10% of victims who fall for fake antivirus software try to get their money refunded, what’s more surprising may be that some firms do refund money to victims.
The Cost of Fake Antivirus Software
Fake antivirus software costs victims between $49.95 to $69.95 for six-month licenses, and $79.95 to $89.95 for lifetime licenses. Three operations were investigated as part of the research with revenues generated by firm 1 (AV1) of $11 million, firm 2 (AV2) $5 million and firm 3 (AV3) a massive $116.9 million.
The conversion rates of purchases of the fake software varied between 2.1 and 2.4 per cent. For AV1 they installed around 8.4 million trial versions of fake software and this generated 189,342 sales to the “full version” within 3 months. A 2% conversion rate is high and it’s worrying so many people fall for this scam.
Refunds of Fake Antivirus Software
The study showed AV1 granted 5,660 refunds, or 3% of its sales; AV2 granted 11,681 refunds, or 8.5% of its sales; and AV3 granted 151,553 refunds, or 7.1% of its sales. Most victims even got their refund within seven days.
The AV firms in the study would monitor the amount of refunds requested from victims’ credit card companies. When chargebacks increased over a short period of time the fake virus firms would grant more refunds, as this lowers the rate of chargebacks and allows for the firms to operate their business for a longer time period.
However, refunds are kept to a minimum in order to keep their relationships with the credit card payment processors good. An unusually high number of refunds would alert payment processors to the fraudulent activity.
Sometimes payment processors are in on the fake software operations. One email conversation discovered during the research warned an AV firm to change its product name so as not to end up on Google as a fake antivirus product. The reason behind this loyalty could be attributed to the payment processing firms charging 8-20% per transaction to “high risk merchants” with high volumes of chargebacks.
Fake AV firms are typically run by organised criminals who rely on affiliates to act as sales people to infect as many computers as possible. Affiliates for fake antivirus software can earn a lot of money with commissions of anything up to 80% per sale, one affiliate earned a whopping $1.8million in only two months.
How to Prevent the Purchase of Fake Antivirus Software
Fake antivirus software firms can be very sophisticated even offering technical support via call centres in India, which makes it very hard for people to spot they are not using authentic antivirus software. To prevent yourself from purchasing fake software you should always research the product you intend to purchase by reading antivirus reviews
Guest Article by Louise Goldstein