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My question is about the category of AVG alerts which contain the text "False alarm", such as the one that appears in this old forum thread: http://forums.avg.com/us-en/avg-forums?sec=thread&act=show&id=219213

If AVG knows something to be a false alarm (i.e not malware), why does it give an alert at all? Or if it doesn't know, why does it say "False alarm"?

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As far as I can tell it's their way of flagging suspicious files/activity and letting the user decide what to do, although the terminology used does sound especially silly. Given their well–publicised problems in the past (detecting user32.dll as malware and rendering systems unbootable after deleting it, detecting ZoneAlarm as malware and so on), I recommend you switch to a better free or paid antivirus.

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Almost every anti virus, paid or not, has had false alerts and has rendered system unbootable. There is not way around this. Either a virus scanner only recognises previously confined viruses. And thus is always vulnerable for new viruses. Are they try to do 'smart stuff' and sometimes fail. Havinf said that, that is not to say you should or should not use AVG. Just that such an incident in the past is not important. –  Hennes Mar 26 '13 at 7:11
@Hennes: I have seen and had to deal with the fallout of several AVG–related incidents in the past. No AV is perfect obviously, but in my personal opinion (after comparative testing) I've found that AVG just isn't that great a product and I don't really care what others may have to say about it. My recommendation above stands, though of course people are free to decide on their own what they want to use. –  Karan Mar 26 '13 at 7:21

It means it is likely to be a false positive. However, it may not be! Yes, confusing I know.

The idea is if it is detected you then use other tools like https://www.virustotal.com/en/ to be sure or get a better understanding!

Source; http://forums.avg.com/gb-en/avg-forums?sec=thread&act=show&id=395

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