Scareware is a form of malware designed to scare you into taking some action that further damages or infects your computer or costs you money.
Most common forms of scareware display a list of infections supposedly on your computer, and inform you that you need to purchase the “full version” to remove them. In fact, the infections are completely fake and are listed only to intimidate you into handing over money. Whether or not the software you purchase actually does anything at all is debatable, but it’s not uncommon for this program to contain even more malware.
Scareware is a form of malware which uses social engineering to cause shock, anxiety, or the perception of a threat in order to manipulate users into buying unwanted software. Scareware is part of a class of malicious software that includes rogue security software, ransomware and other scam software that tricks users into believing their computer is infected with a virus, then suggests that they download and pay for fake antivirus software to remove it. Usually the virus is fictional and the software is non-functional or malware itself. According to the Anti-Phishing Working Group, the number of scareware packages in circulation rose from 2,850 to 9,287 in the second half of 2008. In the first half of 2009, the APWG identified a 585% increase in scareware programs.
The "scareware" label can also apply to any application or virus which pranks users with intent to cause anxiety or panic.