Microsoft Sues Vancouver Family Over Click Fraud

A mother and her two sons are on the wrong end of a $750,000 suit filed by Microsoft. The Redmond-based company claims the Vancouver, British Columbia family is responsible for an immense online scam using pay-per-click ads (also known as click fraud).

The civil complaint was filed in a Seattle federal court earlier this week.

According to reports, Microsoft has been investigating the matter for over a year and names three individuals from the west coast Canadian city: Melanie Suen, Eric Lam, and Gordon Lam. Although there's no confirmation on it yet, Microsoft has stated that it believes the team is comprised of a mother and her two sons. (Source: theregister.co.uk)

MS Out $1.5 Million

The scam stems from complaints made by automotive insurance companies to Microsoft last year. Several of these firms noticed unusually high spikes in traffic to pay-per-click ads on Microsoft's search tool. As a result of the team's intentionally overkill searching of terms "World of Warcraft" and "auto insurance quote," Microsoft was forced to pay out about $1.5 million to advertisers in those spaces.

Click Fraud: An Example

The scam's benefit for the Lam's is complex, but it is suggested that they repeatedly clicked on a competitor's ad, thereby diminishing the competitor's ad budget. Once the competitor's ad is removed due to a daily spend limit, other businesses (Lam's, for example) are able to advertise for considerably less money and be in the #1 ad position: an advantage that garners the most clicks on an ad network. (Source: informationweek.com)

Click Fraud Down, Overall

As mentioned, Microsoft has been working on the case for a long time. "Microsoft gathered substantial evidence that a handful of individuals were likely responsible for these click fraud attacks, which affected online advertisements related to auto insurance and the online role playing game, World of Warcraft," said a company spokesperson.

Thankfully, it seems click fraud like this is on the decline. According to insiders, that's down to the efforts of the search engines themselves -- including Google, MS, and Yahoo! -- which have since the start of 2009 worked hard to prevent botnet click fraud like the one being investigated.