A man accused of using Microsoft's name on Google's AdWords system to trick consumers into buying ineffective antispyware software has agreed to pay $2,000 (about £1,070) to settle the charges.

Seth Traub, of Portsmouth, New Hampshire, is the third person to settle a lawsuit filed in January by Microsoft and the Washington State Attorney General's office. The suit alleges that software vendor Secure Computer sold an antispyware product that not only fails to remove spyware as advertised, but actually makes users' computers less secure.

Traub ran adverts using Google AdWords to create an advertising link reading 'Microsoft AntiSpyware'. It was displayed when users searched for terms such as 'Microsoft spyware cleaner', or 'Microsoft antispyware', the Attorney General said in a statement yesterday.

The adverts earned him 75 percent of the $49.95 (£27) unsuspecting users would spend to purchase a copy of Spyware Cleaner. Traub has not admitted any wrongdoing in the settlement, which was finalised on Monday, but will pay $2,000 in legal costs and lawyer fees, the Attorney General's office said.

Traub and two others, Zhijian Chen of Portland, Oregon, and Manoj Kumar of Maharashtra, India, were charged with using inappropriate techniques to advertise Secure Computer's Spyware Cleaner software. Last April, Chen paid $84,000 (£45,000) in fines after pleading guilty to violating Washington's Computer Spyware Act.

A fourth man, Gary Preston, of New York state, has paid $7,200 (£3,900) after allegedly allowing his name to be used as an alias by Secure Computer.

The lawsuit against Secure Computer and its president, Paul Burke, is ongoing. It is the first to be filed under Washington's 2005 Computer Spyware Act.