Have you ever been clicking your way through cyberspace, when suddenly, a very important-looking window pops up? It usually looks like it’s part of Microsoft Windows, and it says something like, “Warning! Your computer is at risk! Click ‘OK’!” Do you click on it? Is your computer really at risk? Is Windows trying to tell you something?

By now, you’ve probably figured out where this is going: that pop-up is a scam, something known as “scareware.”

Those who DO click “OK” on the serious-looking window out of fear that their PC is actually in danger usually start a download of malware onto their hard drives. The program pretends to run a scan, telling the user that there are lots of “critical problems” with their computer that must be fixed. Of course, those mysterious problems do get fixed if the customer agrees to buy the full version of the repair software for roughly $40. The entire thing is an elaborate scam, one that is both illegal and incessant; one IP address appears to have received the pop-up at least 200 times in a single day.

It’s a “blatant rip off of consumers,” Washington State Attorney General Rob McKenna said, as reported on CNET news. He said that users were “duped into downloading a fake scan and then duped into paying for software they don’t need.”

These pop-ups have been around long enough for most of us to encounter one at least once, but now there is some news on the scareware front. Microsoft and the Attorney General’s office in Washington state filed or amended lawsuits last month against companies including Alpha Red, Branch Software, SMP Soft and Registry Update, all of which allegedly use the fake security warnings to scare users into spending money on a fix. In some of the cases, the defendants are listed as “John Doe” because the owners of the companies aren’t known. In the case of Alpha Red and Branch Software, James Reed McCreary is the owner named in the lawsuits. His Texas-based company sells a scam product called Registry Cleaner XP for $40. The lawsuits charge McCreary and the other companies with misrepresentation, harassment, and high pressure sales. The state of Washington seeks an injunction and undisclosed civil penalties from McCreary.

The lawsuits were made possible because of Washington’s Computer Spyware Act, which makes it illegal to create scary messages that appear to come from elsewhere (in this case, Windows) in order to terrify people into a software purchase. The Computer Spyware Act was put into place in 2005, and in that year, Microsoft and Washington state successfully sued Secure Computer (makers of Spyware Cleaner) for $1 million when they charged the company with using scareware pop-ups. The law was recently updated to include outlawing the sort of deception that McCreary and others allegedly conducted. The state has filed seven cases under the law since 2005, while Microsoft has filed 17 spyware-related legal actions in that time.

In the current case, consumers who have experienced the scareware ads can file their own lawsuits if they wish. Since many people have a healthy fear of a security breach on their computer, the messages work particularly well when the scammers play on that fear, suggesting that personal privacy and security are at stake. The defendants, if convicted in the current lawsuit, face fines of up to $2,000 per violation, plus restitution and attorney fees. We’ll keep you posted on the results and any future lawsuits brought against the companies.

So what should you do if the “Warning!” pop-up appears on your screen? Don’t click the red X in the upper right hand corner of the window, for one thing, says Christopher Null of Yahoo! Tech Blogs. While it appears to be the same sort of button that makes the standard Windows box go away, remember that this isn’t a true Windows box. Clicking the red X might start the download of the malware. Instead, go to the task bar at the bottom of the screen and right-click on the pop-up’s bar to close it. Other than that, you can close and restart your Internet browser to make the pop-up go away.

Just don’t click “OK”… It’s anything BUT okay.

Sources for this article: Yahoo! News, Yahoo! Tech News, Yahoo! Tech Blogs, CNET news, Scareware, Seattle Post Intelligencer