Shaun Snapp on Criminal Behavior of Software Vendors

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Executive Summary

It is common for software to provide false information to customers.
Learn why, in many cases, this can qualify as criminal intent.

Introduction

Software vendors typically present themselves as providing information about their software. However, many software vendors lie so extensively about their applications that it provides an entirely false impression of what the software can do. The crime to be committed is fraud.

It is curious how infrequently the term fraud is used in software, but it should be used quite frequently. If a company that manufactures refrigerators lie about what the refrigerator can do, that is very quickly called fraud. But because software tends to be more esoteric, it is infrequent for the term fraud to be used, even when it fraud and therefore criminal. In analyzing statements by vendors, we repeatedly find false statements contained in marketing documentation. It is considered very normal in the software industry to mislead customers. In the past, when we have supported sales efforts when we have pushed back on false statements, we have often been accused of doing things that would “lose the account.” In the head of a sales pursuit, entirely false statements are justified based on attaining the sale. The truth or falsehood of a statement often falls to the wayside.

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Conclusion

The false statements made by many software vendors qualify as fraud and therefore is, in fact, criminal. Yet, it is virtually unheard of for criminal investigations to be opened against software vendors by the government. Even in cases where customers have been completely lied to, the most the software vendor will face is a civil suit and no criminal implications.

Software vendors operate in an unregulated market. Many vendors feel, and are accurate in feeling, that they are immune from the repercussions of providing false information to customers. This is because we do not define fraudulent information as to criminal if it is part of selling software.