• by Wendy Davis  @wendyndavis, May 20, 2013

Web company AOL and software vendor Support.com will pay $8.5 million to settle a lawsuit brought by consumers who say they were duped into purchasing software that promised to repair problems with their computers.

The settlement agreement, granted approval last week by U.S. District Court Magistrate Judge Jacqueline Scott Corley in the Northern District of California, requires the companies to issue refunds of up to $25 to people who submit claims against the companies.

The settlement also calls for the companies to donate $200,000 to the advocacy groups Electronic Frontier Foundation and Consumer Watchdog.

Similar to other scareware lawsuits, the consumers in this case alleged that the vendor Support.com and AOL's Computer Checkup (which uses software developed by Support.com) misrepresented that their software programs would identify and resolve a host of technical problems with computers. The companies allegedly offered to perform a free “scan,” which often found problems with users' computers. The companies then offered to sell software -- for which AOL allegedly charged $4.99 a month and Support.com charged $29 -- to remedy those problems.

In the order approving the settlement, Corley wrote that the donations to the EFF and Consumer Watchdog have “a substantial nexus to the interests of the class members.”

“Distributing a portion of the [funds] to Consumer Watchdog will meet the interests of the silent class members because the organization will use the funds to help protect consumers across the nation from being subject to the types of fraudulent and misleading conduct that is alleged here,” Corley wrote. “EFF’s mission includes a strong consumer protection component, especially in regards to online protection.”