The US Federal Trade Commission (FTC) announced on Thursday that it has settled with a movie download service accused of bombarding customers with pop-up advertisements.

Under the consent agreement, Digital Enterprises, which does business as California-based Movieland.com, must pay more than $501,000 (£251,000) in consumer redress, ban future downloads without consent and offer a way to remove the adware.

In August 2006, the FTC filed a complaint in US District Court contending that the operator of Movieland.com, Moviepass.tv and Popcorn.net pummeled users with pop-up ads that could not be closed or minimised.

The FTC, which received hundreds of complaints from customers, said the ads demanded users pay up to $99 (£49) to get rid of the ads. The ads said users must pay the fee because they failed to cancel their three-day free trial service for the website. Many victims said they never signed up for such a trial or even heard of the download services.

When users tried to add or remove programs through Windows, they were redirected to a website demanding payment, the FTC said. The only ways to disinfect machines were to pay the Digital Enterprises or seek assistance from a computer expert.

Rick Carlson, managing director of the Americas at anti-spyware firm GRISOFT, applauded the FTC's enforcement action, but said such violations will continue as long as there is ample opportunity for scammers to make money.

"Unfortunately, I think it's a drop in the bucket," Carlson said. "This particular case appears extremely brazen, as far as the efforts put forth to do what can be seen as extortion."

In January, a District Court judge in California ordered Movieland to limit pop-ups and seek consent from users before offering any ads that might seek payment from customers.

Representatives from Digital Enterprises could not be reached for comment. Movieland.com is online, but does not allow visitors to access any features.