Cybercriminals are employing increasingly persuasive online scare tactics to convince users to purchase rogue security software – "scareware" that pretends to be legitimate security software, but could install malicious code or compromise computer security.

This is one of the findings of Symantec's Report on Rogue Security Software, based on data obtained during the 12-month period of July 2008 to June 2009.
To encourage unsuspecting users to install their rogue software, cybercriminals place web site ads that prey on users’ fears of security threats. These ads typically include false claims such as “If this ad is flashing, your computer may be at risk or infected”, urging the user to follow a link to scan their computer or get software to remove the threat.
According to the study, 93% of the software installations for the top 50 rogue security software scams were intentionally downloaded by the user. As of June 2009, Symantec has detected more than 250 distinct rogue security software programs.
The initial monetary loss to consumers who download these rogue products ranges from R200.00 to R700.00. However, the costs associated to regain ones’ identity could be far greater.
Not only can these rogue security programs cheat the user out of money, but the personal details and credit card information provided during the purchase can be used in additional fraud or sold on black market forums resulting in identify theft.
To make matters worse, some rogue security software actually installs malicious code that puts users at risk of attack from additional threats. As a result, installing these programs can lower the security posture of a computer while claiming to strengthen it.
For example, rogue programs may instruct the user to lower or disable any existing security settings while registering the bogus software or prevent the user from accessing legitimate security Web sites after installation. This, in turn, leaves users exposed to the very threats the rogue software promised to protect against.
There are several methods employed to trick users into downloading rogue security software, many of which rely on fear tactics and other social engineering tricks. Rogue security software is advertised through a variety of means, including both malicious and legitimate Web sites such as blogs, forums, social networking sites, and adult sites.
While legitimate Web sites are not a party to these scams, they can be compromised to advertise these rogue applications. Rogue security software sites may also appear at the top of search engine indexes if scam creators have seeded the results.
To increase the likelihood of fooling users, rogue security software creators design their programs so that they appear as credible as possible, mimicking the look and feel of legitimate security software programs.
In addition, these programs are often distributed on Web sites that appear credible and enable the user to easily download the illegitimate software.
Some malicious sites actually use legitimate online payment services to process credit card transactions and others return an e-mail message to the victim with a receipt for purchase – complete with serial number and customer service number.
Cybercriminals are profiting from a highly organised pay-for-performance business model that pays scammers to trick users into installing bogus security programs. According to the study, the top 10 sales affiliates for the rogue security distribution site TrafficConverter.biz reportedly earned an average of R8,797-million – which is more than four times the salary of the South African president.
These practices are similar to the affiliate marketing programmes made popular by online retailers. Affiliate marketing programmes reward participating affiliates or members for each visitor or directed to the online retailer’s web site due to the affiliate’s marketing efforts.
Through this model, affiliates of rogue software scams can earn between R0,07 and R4.00 for every successful installation. The highest prices are paid for installations by users in the US, followed by the UK, Canada, and Australia. Some distribution sites also offer their affiliates incentives in the form of bonuses for a certain number of installs, as well as VIP points and prizes such as electronics and luxury cars.