Ryan Ramminger had initiative: The Ohio man hatched a business plan, built a “rewards” app, and persuaded tens of thousands of people to download it. What Ramminger didn’t have was ethics, which is what led authorities on Monday to call him a scammer and order him to stop fooling people with deceptive software.
According to a Federal Trade Commission complaint, the app known as “Prized” was actually a trojan horse for mining virtual currency, including LiteCoin, for the benefit of Ramminger. Unbeknownst to users, the clandestine mining activity drained their battery, gobbled data, and slowed charging times.
The app, which was once available in the Google Play and Amazon App store, promised consumers they could win shopping and entertainment prizes. It looked like this:
Unfortunately for users, the app not only loaded the phones’ with mining malware, but it even failed to deliver the prized rewards.
“Hijacking consumers’ mobile devices with malware to mine virtual currency isn’t just deplorable; it’s also illegal,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “These scammers are now prohibited from trying such a scheme again.”
Under a settlement with the FTC and the New Jersey Attorney General, Ramminger and his company Equiliv Investments will have to pay $5,200 and refrain from further software scams in the future (the penalty will be $50,000 if he breaches the deal).
It’s unclear how much, if any, money Ramminger made from the scam since it ordinarily takes considerable computing power to mine virtual currency—computing power that is likely beyond what even thousands of smartphones could deliver.
For consumers, the episode is yet another lesson in the need for caution when it comes to strange apps in Android stores. Last year, the FTC settled with the maker of a “brightest flashlight” app, which covertly collected the location of 50 million users for advertising purposes.
Here’s a copy of the complaint: