Privacy Law

7 Retailers Settle with FTC, Agree to Stop Spying on Up to 400,000 Computer Rental Customers

Seven rent-to-own companies and a software design firm have agreed to a settlement with the Federal Trade Commission concerning computers that the retailers rented to customers and then used to spy on them without disclosing in advance that the companies intended to do so.

They will not be fined, but have agreed to restrict the use of PC Rental Agent software developed by Pennsylvania-based DesignWare that previously allowed more than 1,600 licensed rent-to-own stores in the United States, Canada and Australia to spy on over 400,000 customers, according to an FTC press release, the Hill’s Hillicon Valley blog and the The Risk Assessment/Security & Hactivism page of Ars Technica.

An FTC complaint earlier this year said the software could be used by retailers to track the geophysical location of rent-to-own computer users, to monitor their online activities and obtain passwords to social media and bank account sites and to photograph individuals near the computer. Several were captured on camera in sexual activities or only partially dressed, according to news reports.

When activated, a “Detective Mode” version of the software had the ability to log keystrokes and take both screenshots and webcam photographs of individuals.

The FTC also said users were tricked into providing personal information via fake “registration” pages for software such as Internet Explorer and Microsoft Windows. Instead of being used to register software, the information went to DesignWare, which provided it to retailers. In addition to facilitating potential illegal activity by retailers and violations of consumers’ right to privacy, the PC Rental Agent software and retailers who used it failed to disclose adequately to consumers how their data would be used, the complaint said.

News reports suggest that, in addition to providing a means for tracking down those who owed rental payments on their computers (and shutting the computers down, if they are lost or stolen or renters get too far behind on payments), the software may have been used to gather data for third parties such as debt collectors.

“An agreement to rent a computer doesn’t give a company license to access consumers’ private emails, bank account information, and medical records, or, even worse, webcam photos of people in the privacy of their own homes,” said FTC Chairman Jon Leibowitz in the agency’s press release. “The FTC orders today will put an end to their cyber spying.”

Related coverage: “Lawsuit: Aaron’s Rental Co. Laptops Can Track Users’ Keystrokes and Screenshots, Take Webcam Photos” “Sears Ends $10 ‘Spyware’ Program for Getting Customer Computer Info” “It Isn’t Necessarily Big Brother, But Somebody Is Potentially Watching, Virtually All the Time”

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