MANILA, Philippines - You have been encoding important data on your laptop when the screen suddenly turns blue or shuts down. Then you try to re-open your computer and, to your horror, you discover that you can no longer access most of your files. Your computer has been infected with a virus.

For students, files wiped out from their computers can mean a failing grade. For small businesses, this could be very costly, as it could result in lost revenues and business opportunities.

“Small and medium enterprises [SMEs] are particularly vulnerable when they use pirated software. The hidden cost of pirated software is significant and, contrary to popular belief, can’t be remedied by simply running anti-virus software,” said Keshav Dhakad, Microsoft director of Intellectual Property for Asia Pacific and Japan, said in an interview.

Unlike big companies, Dhakad noted that small companies in the Philippines are at risk because they do not have an management information system that is dedicated to maintaining computers. This, he said, makes it more crucial for SMEs to invest in genuine software so they don’t encounter problems later on.

Microsoft recently unveiled details on malware threats that examined name-brand personal computers with pirated software installed as counterfeit software DVDs, sourced from Indonesia, Malaysia, the Philippines, Thailand and Vietnam. The study, which extends research originally conducted in December 2012, examined a total of 282 computers and DVDs, and found an average malware infection rate of 69 percent, increase of six points over the preliminary study.

The company’s Security Forensics team also found that pirated copies of Windows embedded with malware spread across numerous well-known PC brands including Acer, Asus, Dell, HP, Lenovo and Samsung. Dhakad said the company believes that neither the counterfeit images nor the malware originated from, or were installed by, the individual PC manufacturers. Rather, the computers were likely shipped with non-Windows operating system which were later replaced by individuals in the supply chain or retail channel who deal in the illegal duplication and distribution of pirated software.

According to Microsoft’s study, infection rates of pirated software varied significantly across Southeast Asia: the Philippines surfaced at 42 percent, a full two out of every five computers and DVDs tested were infected. In Vietnam malware was found on 66 percent of the pirated DVDs and a full 92 percent of hard drives tested. In total, Microsoft’s testing revealed 5,601 instances and 1,131 unique strains of malware and virus infections in its Southeast Asia sample, including the highly dangerous “Zeus” trojan.

Dhakad explained that Zeus is a password-stealing trojan known to use “keylogging” and other mechanisms to monitor people’s online activity. Keyloggers record a user’s every keystroke to steal personal information, including account usernames and passwords. According to the RSA 2012 Cybercrime Trends Report, the Zeus trojan alone is estimated to have caused more than $1 billion in global losses in the last five years.

“Those who buy pirated software think they got a good deal. But here’s the real deal: They can lose their bank accounts and their social-networking accounts,” he said.

Of the 5,601 malware strains, Microsoft said 3,800 trojans were found in the computers and DVDs tested. Trojans appear legitimate and useful, but perform malicious and illicit activity. The team also found bots or malware that allows criminals to take control of a victim’s computer, performing automated tasks over the Internet without the user knowing about it.

Apart from the financial loss that could arise from the use of pirated software, Dhakad said certain malware could post a security threat. He demonstrated how one webcam trojan has enabled a hacker to inject a “backdoor” and peep people without any notice. The webcam trojan was a malware that hid in the background as a normal picture file.

To avoid the hidden cost of software piracy, Dhakad shared these tips to consumers:

• When purchasing a new PC, always ask for a genuine, pre-installed operating system.
• Buy from a trusted reseller and avoid deals that seem “too good to be true.”
• Ensure all software purchases come in their original packaging.
• When buying a PC with Windows, look for the genuine label and certificate of authenticity that Microsoft requires to be affixed to all PCs on which Windows is pre-installed. As a further check after purchase, log on to www.howtotell.com to confirm the label is authentic

Dhakad encourages consumers who suspect they’ve received pirated or counterfeit software to report it at www.microsoft.com/piracy. He said customers who report suspected violations can provide valuable insights and have a positive impact in the fight against piracy.

Since 2007, the company has received more than 10,000 piracy reports from within Southeast Asia, many from people who bought a name-brand PC, paying more money to get “the real thing” but ending up with far greater risk and liability at the hand of counterfeiters.

Microsoft Corp. is an American multinational company that is regarded as a leading software provider. Its local subsidiary Microsoft Philippines was established in 1995.