Adware maker Zango has been cheating on last year's FTC settlement, spyware researcher Ben Edelman found. The company continues to install its software without proper disclosure to end users, and the pop-up ads that it server too are lacking clear identification.

These problems are hardly new to neither Zango nor the overall adware industry. Even if Zango doesn't defraud its users itself, it has dozens of distributors who have a clear incentive to do so: Zango pays them a small sum (less than $1) for every installation. So just like an unscrupulous tire salesmen will puncture all the tires in his neighborhood at night, botnet herders will install as many adware applications as possible on the computers they control.

Zango doesn't control these installations, but by continuing to pay operators of botnets and criminal websites, the company is allowing them to continue to operate. The FTC settlement furthermore was intended to allow consensual installations to continue while curbing the nefarious ones. As Edelman points out, Zango has failed to hold its end of the bargain.

In the first episode of the Security Watchdog video blog that's posted below, you can see a real world adware infection where a system gets infected by half a dozen applications, including Zango, without the user's consent. The installation demonstrated in this video predates the FTC settlement.

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Next week: Cross Site Scripting attacks