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STATE OF WASHINGTON KING COUNTY SUPERIOR COURT

STATE OF WASHINGTON,

Plaintiff, v. iYOGI, INC., a New York corporation; and VISHAL DHAR, individually and on behalf of his marital community, as President of iYogi, Inc.,

Defendants.

NO. COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF UNDER THE CONSUMER PROTECTION ACT, CHAPTER 19.86 RCW, AND THE COMPUTER SPYWARE ACT, CHAPTER 19.270 RCW

COMES NOW PLAINTIFF, State of Washington, by and through its attorneys Robert

W. Ferguson, Attorney General; Daniel Davies, Assistant Attorney General; and Andrea

Alegrett, Special Assistant to the Attorney General, and brings this action against Defendants

named herein, alleging as follows on information and belief:

I. INTRODUCTION

1.1 Defendant, iYogi, Inc. (“iYogi”), sells computer technical support services to

consumers throughout the country. iYogi induces consumers to purchase its services by

making a series of misrepresentations in violation of Washington’s Consumer Protection Act,

RCW 19.86 et seq. First, iYogi deceives people into believing it is a part of major computer

software and hardware companies like Norton, Microsoft, or Apple. iYogi representatives then

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF UNDER THE CONSUMER PROTECTION ACT, CHAPTER 19.86 RCW AND THE COMPUTER SPYWARE ACT, CHAPTER 19.270 RCW

1 ATTORNEY GENERAL OF WASHINGTON Consumer Protection Division 800 Fifth Avenue, Suite 2000

Seattle, WA 98104-3188 (206) 464-7745

Geraldn

Typewritten Text

15-2-30407-1 SEA

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use iYogi proprietary software to remotely access consumers’ computers in order to identify

complex looking files they misrepresent are “infected files” harming the computer. The

representatives then convince consumers they need to download iYogi’s diagnostic software to

fully identify their computer problems. The software by design flashes a variety of warning

signs causing a “Critical” computer status regardless of the computer’s health, and iYogi’s

representative again falsely claims that malware or computer viruses have infected the

consumer’s computer. After making these claims, iYogi proceeds to sell the consumer

technical support plans costing between $149.99 and $379.90, claiming the services are

necessary to “fix” the consumer’s non-existent problems. iYogi also misrepresents that

consumers’ computers lack any anti-virus programs, in order to induce them to purchase

iYogi’s own anti-virus software. Numerous Washington consumers have purchased iYogi’s

technical support services and anti-virus software based on these deceptive actions.

1.2 iYogi also violates the Computer Spyware Act, RCW 19.270.040, by inducing

Washington computer owners and operators to install its proprietary software onto their

computers by misrepresenting that it is necessary to repair and protect the computer’s security.

In truth, the iYogi software by design provides alarmist reports regardless of the computer’s

health or is redundant to anti-virus software already on the consumer’s computer.

II. JURISDICTION AND VENUE

2.1 This Complaint is filed and these proceedings are instituted under the provisions

of the Unfair Business Practices – Consumer Protection Act, Chapter 19.86 RCW, and the

Computer Spyware Act, Chapter 19.270 RCW.

2.2 The violations alleged in this Complaint have been made and are being

committed in whole or in part in King County, Washington, by Defendants named herein.

2.3 The violations alleged in this Complaint are injurious to the public interest.

2.4 Authority of the Attorney General to commence this action is conferred by

RCW 19.86.080, RCW 19.86.140, and RCW 19.270.060.



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III. DEFENDANTS

3.1 Defendant iYogi, Inc. is a New York corporation with its principal place of

business located at 291 Broadway, Suite 305, New York, New York 10007.

3.2 Defendant Vishal Dhar was, at all material times to this lawsuit, the President and

co-founder of iYogi, and as such, controlled its policies, activities, and practices, including those

alleged in the Complaint herein. Defendant Dhar resides in New York, New York. Defendant

Dhar is married to Sarah Killough-Dhar, and together they constitute a marital community. All

actions taken by Defendant Dhar as alleged in the Complaint herein were and are for the

benefit of his marital community.

IV. FACTS

A. iYogi

4.1 iYogi, Inc. is the United States-based part of one of the largest retailers of

consumer technical support services in the world. The iYogi organization as a whole has over

3 million customers, operates in at least 11 countries, and has several business entities around

the world. It maintains a large online presence, consisting of at least 245 Internet domains,

with some of those domains directed to the United States, United Arab Emirates, Canada,

India, the United Kingdom, Spain, France, Italy, Australia, and Germany. In addition to its

web presence, iYogi uses or has used at least 17 phone numbers for its call center.

4.2 According to iYogi, its technical support includes the following services:

computer diagnostics and repair, general troubleshooting, updates to computer drivers, security

protection against online threats, help connecting to the Internet, and PC speed and

performance optimization.

B. iYogi’s Advertisements

4.3 Consumers learn of iYogi through a variety of methods, including performing a

search for specific technical support and finding iYogi’s online advertisements. iYogi

purchases advertising on Internet search engines linked to specific terms relating to various



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computer and software companies. For example, if a consumer searches for “Apple tech

support” or “HP tech support” in Google, she will find iYogi as a top search result:

Figure 1, Search for “Apple Technical Support” at https://www.google.com, dated July 16, 2015.

4.4 When a consumer contacts iYogi, the representative who fields the telephone

call associates himself with Apple, Hewlett Packard, or whatever specific company the

consumer inquires about. For example, the iYogi representative will claim he is a certified

Microsoft technician but may fail to disclose that Microsoft has not hired him to provide

technical support services to customers. Likewise, if a consumer calls iYogi thinking she is

speaking with a company like Symantec Corp., the producer of Norton Antivirus software, the

iYogi representative will not correct the consumer’s misunderstanding.

C. iYogi Claims to Diagnose Problems with the Consumer’s Computer

4.5 After introducing himself, the iYogi representative asks the consumer several

technical-sounding questions about her computer, including inquiries about its manufacturer

and operating system. Next, the representative directs the consumer to navigate to iYogi’s

owned and operated website, www.1mb.com, to grant the technician permission to remotely



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http://www.1mb.com/

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access the consumer’s computer. Through this remote access, the representative is able to

perform activities directly on the consumer’s computer as if physically present with the

consumer. The consumer watches on-screen as the technician moves the mouse, types on the

screen, and opens files and folders.

4.6 iYogi’s representative manually performs what appear to be technologically

complex diagnostic tasks. The consumer watches the computer screen while these tasks are

being performed. At the conclusion of the purported diagnostic tasks, the representative

highlights various items on the consumer’s screen and claims that the items are malware,

infected files, or other serious defects harming the computer:

Figure 2, Screenshot of iYogi highlighting purported infected files on a consumer’s computer, dated Oct. 21, 2015.

4.7 Contrary to the iYogi representative’s claims, the highlighted items often are

routine programs or files that pose no harm to the consumer’s computer.



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4.8 The representative then tells the consumer that she must install iYogi’s

“Support Dock” and “PCDiagnostics” software (together, the “Diagnostic Software”) to

diagnose any problems with the computer. The representative claims the Diagnostic Software

is necessary to repair and protect the security of the consumer’s computer.

4.9 The Diagnostic Software displays alarming warning signs when it runs a “scan”

of the consumer’s computer:

Figure 3, Screenshot of iYogi diagnostic report, dated Oct. 21, 2015

4.10 In the screenshot above, the consumer sees on the scan a “warning” for “junk

content” and a “caution” message indicating that 27 errors were detected during the “registry

check.” The consumer is also told that there is a “Windows update error” present and a

problem with the computer’s restore function. The Diagnostic Software displays warnings



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even when a computer is free from defects, indicating that the consumer’s overall “System

State” is “Critical.” In fact, most of these “warnings” are related to routine computer

functions. Contrary to the iYogi representative’s statements, they do not indicate that there is a

problem with the consumer’s computer that will render it inoperable.

D. iYogi Offers to Sell Technical Support Services

4.11 Once iYogi has alarmed the consumer, it offers to sell the consumer technical

support services. iYogi’s support service contracts vary, but include offers to sell a five-year

computer support service contract for $379.90 or a one-year support contract for prices ranging

from $149.99 to $179.99. iYogi offers to include an upgrade from a Windows 7 operating

system to Windows 10 as part of its five-year support service contract, adding that failing to

update will harm the computer and render it inoperable, which is untrue. iYogi states that

upgrading to Windows 10 will cost $199 if the consumer does not purchase a five-year

contract. If a consumer declines the five-year contract, iYogi offers to sell the consumer

Windows 10 for $80. Microsoft currently provides free upgrades from Windows 7 to

Windows 10.

E. iYogi Offers to Sell Consumers Computer Security Software in Addition to Its Technical Support Services

4.12 After a consumer purchases iYogi’s technical support services, iYogi attempts

to sell the consumer its additional TechGenie computer security software (the “TechGenie

Software”) for $79.00. iYogi informs the consumer that she does not have a security system

installed on her computer, reiterates that the consumer’s computer is infected with malware,

and states that the TechGenie Software is necessary to remove the malware and protect the

computer from any future viruses. iYogi makes these claims even when the consumer already

has an anti-virus or other computer security program installed on her computer.



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V. CLAIMS

COUNT I: CONSUMER PROTECTION ACT, RCW 19.86.020

5.1 Plaintiff realleges paragraphs 1.1 through 4.12 and incorporates them as if fully

set forth herein.

5.2 In the context of marketing and selling its technical support services, iYogi

makes numerous implied and express deceptive statements; including, but not limited to, the

following:

5.2.1 iYogi deceives consumers into believing it is a part of various software

and hardware providers like Microsoft, Apple, Hewlett-Packard, and

Symantec through the net impression of its representations to

consumers; including, but not limited to, the following:

a. iYogi positions itself so that a consumer who is searching for

“Microsoft tech support,” “Apple tech support,” or “HP tech

support” through a search engine, such as Google, will find

iYogi as a top search result rather than the relevant company’s

own technical support webpage. iYogi purchases placement on

search engines so that its advertising will be featured more

prominently than the software and hardware companies for

which the consumer is actually searching. Consumers who speak

with iYogi’s representatives often believe they are speaking with

representatives of the company for which they originally

searched.

b. iYogi further implies it is a part of other computer companies by

telling consumers that its representatives are “certified

technicians” of companies like Microsoft.



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c. iYogi fails to correct consumers who indicate to iYogi that they

believe they are speaking with representatives of other computer

companies like Microsoft or Symantec.

5.2.2 The Diagnostic Software displays deceptive visual warnings and

diagnostic results, which misrepresent that a consumer’s computer

suffers from defects and infected files. For example, in one instance the

Diagnostic Software scan displayed a final “Critical” PC score of 64%

and indicated that attention was required for the following four items:

1. System Restore – Caution. No restore points detected. 2. Registry Check – Caution. 27 Registry errors detected. 3. Windows Update – Warning. Windows update error detected. 4. Junk Content – Warning. 307 MB Junk files detected.

(See Figure 3.) However, none of the items identified were actual

defects or infected files.

5.2.3 In addition to the deceptive warning signs produced by the Diagnostic

Software scan, iYogi representatives also misrepresent that a consumer’s

computer is infected with malware, computer viruses, or suffers from

other serious defects. For example, iYogi has made the following

deceptive representations to Washington consumers regarding the state

of their computers’ health:

a. iYogi claimed that a user’s network settings showed that her

computer may have been compromised and allowed people to

misuse her personal and financial information. In fact, the

network settings were standard settings and did not provide

anyone access to the user’s information.



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b. iYogi falsely claimed that most of the programs on a consumer’s

computer had stopped working and should be running. The

computer, however, had no defective programs on it.

c. iYogi claimed that a consumer’s computer had low CPU usage,

which was problematic. Low CPU usage means that the CPU

has extra capacity. It does not indicate anything is wrong with

the computer.

d. iYogi claimed that “junk” files took up more than half of the

memory of a consumer’s computer. The files iYogi identified as

“junk” files were actually temporary files that took up nowhere

near half of the computer’s memory.

e. iYogi claimed that the unused portion of a computer’s memory

was being used by “junk” files. This was false. The unused

portion of memory is just that: physical memory in the machine

that is not being used.

f. After the Diagnostic Software scan was finished it showed two

purported errors with the word “Warning” in red. The

representative claimed that it was “registry junk” and that the

registry was the most important part of the computer and that

even a single error would be a point of concern. The

representative further stated that these purported issues showed

that the consumer’s network might have been compromised. The

“registry junk” identified were benign and did not suggest that

the consumer’s computer network was compromised.

5.2.4 In addition to iYogi’s deceptive conduct relating to its sales of technical

support services, iYogi also engages in deceptive conduct when it tries



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to sell consumers its TechGenie Software. Specifically, iYogi

misrepresents that a consumer’s computer does not have any anti-virus

programs installed, when the computer, in fact, has a common computer

security program like Microsoft Security Essentials. It uses this

deceptive statement to convince the consumer to purchase its TechGenie

Software, so that the consumer’s computer will purportedly be

adequately protected.

5.2.5 iYogi misrepresents the value of its technical support services contracts

by inflating the benefit of the services with an overvalued upgrade to the

Windows 10 operating system as part of the package. iYogi tells the

consumer that upgrading to Windows 10 from Windows 7 or 8 costs

$199.00 if the upgrade is done independently, but that the upgrade is

“included” for free as part of iYogi’s five-year service package or for

$80 as part of iYogi’s one-year package. In fact, an upgrade to

Windows 10 is free for Windows 7 or 8 users who choose to do so

independently. In addition, iYogi incorrectly tells consumers that their

computers will stop working if they do not upgrade to Windows 10

soon.

5.3 Defendant Vishal Dhar is the Chief Executive Officer of Defendant iYogi, and as

such, controls and has the authority to control the unfair and deceptive policies and activities that

form the core of iYogi’s sales practices.

5.4 iYogi’s actions affect the public interest because it repeatedly engaged in the

conduct described above and made the claims to dozens—if not hundreds or thousands—of

Washington consumers.



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5.5 The conduct described in paragraphs 5.1 through 5.4 constitutes unfair and

deceptive acts or practices in trade or commerce and unfair methods of competition in violation

of RCW 19.86.020.

COUNT II: COMPUTER SPYWARE STATUTE, RCW 19.270.040

5.6 Plaintiff realleges paragraphs 1.1 through 5.5 and incorporates them as if fully

set forth herein.

5.7 Washington’s Computer Spyware Statute, RCW 19.270 et seq., prohibits a

person from inducing a computer owner to install software by deceptively misrepresenting the

extent to which installing the software is necessary for maintenance or repair of the computer

or computer software, for security or privacy reasons, or for the proper operation of the

computer. iYogi induces consumers to install both its Diagnostic Software and TechGenie

Software in a manner that violates the Computer Spyware Statute.

5.8 With respect to the Diagnostic Software, iYogi representatives deceptively

misrepresent that it is necessary to install the software in order to properly diagnose and

identify problems with a user’s computer that needs repair or maintenance. However, the

Diagnostic Software displays warning signs regardless of whether a computer has any defects

or not. iYogi uses the Diagnostic Software as a method of alarming consumers in order to

convince them to purchase both technical support services and the TechGenie Software.

5.9 iYogi representatives also claim that consumers’ computers lack any anti-virus

programs when the computers are, in fact, running anti-virus programs like Microsoft Security

Essentials. iYogi makes this misrepresentation to convince consumers that installation of

iYogi’s TechGenie security software is necessary for the security of their computers.

5.10 iYogi induces Washington computer owners and operators to install its

Diagnostic Software and TechGenie Software components onto their computers by deceptively

misrepresenting the extent to which installing the software is necessary for maintenance,



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repair, and security of their computers and their computers’ software, and for proper operation

of their computers.

5.11 The conduct described in paragraphs 5.6 through 5.10 violates RCW

19.270.040.

VI. PRAYER FOR RELIEF

WHEREFORE, Plaintiff, STATE OF WASHINGTON, prays that this Court grant the

following relief:

6.1 That the Court adjudge and decree that Defendants have engaged in the conduct

complained of herein.

6.2 That the Court adjudge and decree that the conduct complained of in Paragraphs

5.1 through 5.4 constitutes unfair or deceptive acts or practices and unfair methods of

competition in violation of the Consumer Protection Act, Chapter 19.86 RCW.

6.3 That the Court adjudge and decree that the conduct complained of in Paragraphs

5.6 through 5.10 constitutes violations of the Computer Spyware Act, Chapter 19.270 RCW.

6.4 That the Court issue a permanent injunction enjoining and restraining

Defendants and their representatives, successors, assignees, officers, agents, servants,

employees, and all other persons acting or claiming to act for, on behalf of, or in active concert

or participation with Defendants from continuing or engaging in the unlawful conduct

complained of herein.

6.5 That the Court assess civil penalties pursuant to RCW 19.86.140 of up to $2,000

per violation against Defendants for each and every violation of RCW 19.86.020 caused by the

conduct complained of herein.

6.6 That the Court assess damages pursuant to RCW 19.270.060 in the amount of

$100,000 per violation of the Computer Spyware Act, RCW 19.270.



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6.7 That the Court make such orders pursuant to RCW 19.86.080 as it deems

appropriate to provide for restitution to consumers of money or property acquired by

Defendants as a result of the conduct complained of herein.

6.8 That the Court make such orders pursuant to RCW 19.86.080 and RCW

19.270.070 to provide that Plaintiff, State of Washington, have and recover from Defendants

the costs of this action, including reasonable attorney's fees.

6.9 That the Court order such other relief as it may deem just and proper to fully

and effectively dissipate the effects of the conduct complained of herein, or which may

otherwise seem proper to the Court.

DATED this I C-11\ day of December, 2015.

Presented by:

ROBERT W. FERGUSON Attorney General

DANIEL DAVIES, WSBA #41793 Assistant Attorney General ANDREA ALEGRETT Special Assistant to the Attorney General Attorneys for Plaintiff State of Washington



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