Secure Computer LLC has agreed to pay a $1m fine to the state of Washington as part of a legal settlement over misleading claims by its anti-spyware software.

The suite alleged that Secure Computer LLC used a number of misleading methods to push its security software on consumers.

The company ran sites that offered "free spyware scans" which would yield fraudulent results, telling users that their systems had been infected with spyware, even if the system was clean.

The Washington Computer Spyware Act explicitly prohibits software vendors from falsely claiming that a piece of software is needed for security purposes

The suit also alleges that Popup Padlock, another Secure Computer LLC product, was marketed as an add-on to the company's Spyware Cleaner product. Popup Padlock, said the Attorney General Rob McKenna, was a duplicative program that was not necessary to install.

Rogue security software is a popular revenue stream for online criminals. It is often put into a category with fake codecs, where malware is presented as codecs that promise to allow users to play video or audio formats.

Secure Computer LLC stopped distribution of both programs in January, when the suit was first filed.

The websites for Spyware Cleaner and Popup Padlock displayed blank pages with a line of text that declared "Secure Computer, LLC is out-of-business."

The settlement, said the attorney general, "sends a strong message to internet businesses that they must promote their products ethically and legally. "

"We won't tolerate deceptive marketing such as 'scareware' that preys on consumers' fears about spyware and online threats."

Along with the restitution, Secure Computer LLC and its president, Paul E. Burke, will pay $200,000 in civil penalties and $725,000 in state attorneys fees.

A pair of third-party distributors also settled in connection with the case. In April, a distributor from Oregon agreed to pay $84,000 in fines for sending users fraudulent messages designed to look like Windows security alerts. And in June, a New Hampshire man settled with the state for $2,000 for deceptively marketing Secure Computer LLC products as Microsoft-sanctioned software.