A type of software that is defined as malware, meaning it is designed specifically to damage or disrupt a computer system. In this case, not only does the software disrupt your system, it's going to try and trick (or scare) you into making a purchase using your credit card. Scareware is also called smitfraud or rogue security software.
See rogue antivirus software.
See also "Rogue Anti-Virus Software Explained" in the Did You Know...? section of Webopedia.
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