Firms face 20-year ban on using spyware on PC rental customers

Still allowed to use geolocating kit, but must ask permission.

Seven “rent-to-own” furniture and appliance companies face a proposed 20 year ban on running spyware on their customers’ computers as part of a settlement with the US Federal Trade Commission (FTC).

The companies facing the ban had licensed a monitoring and tracking software product called “PC Rental Agent” from now defunct software firm, DesignerWare. The company promised to help rental outfits track and recover stolen computers and expedite payment collection.

According to the FTC's complaint, as of August 2011, approximately 1617 rent-to-own stores in the United States, Canada, and Australia have licensed PC Rental Agent. The spyware has been installed on approximately 420,000 computers worldwide.

The software contained a remote “kill switch” which disabled the device and an optional feature to remotely wipe the device. Another add-on module, “Detective Mode”, allegedly allowed DesignerWare to log keystrokes, take screenshots and use the device’s webcam.

This feature was activated upon a request by the store to DesignerWare, which would then produce a bogus registration page on the renters' device, duping them into submitting contact details.

The software company passed the data, including webcam shots of “children, partially undressed individuals, and intimate activities at home” to the rental firms, according to the FTC.

It had also collected and forwarded financial details, passwords to email accounts, medical records, private emails to doctors, and bank and credit card statements.

The software’s physical tracking feature functioned by cross-referencing WiFi hotspots to pinpoint the location and movements of rented computers.

Use of PC Rental Agent came to light last year after a Wyoming couple sued one of the seven companies in question, a franchisee of Aaron's Rental Store. A store manager who had visited the couple's house to collect payments presented a picture of the renter using his computer from the device's webcam.

The FTC said DesignerWare’s use of geolocation tracking software without first obtaining permission was “unfair and illegal”, while selling software that allowed clients to gather personal information about rental customers was “unfair and violated the FTC ACT”.

“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 Jon Leibowitz, Chairman of the FTC. “The FTC orders today will put an end to their cyber spying.”

While the “rent-to-own” companies face a proposed 20 years ban on using monitoring software in connection with rental transactions, they can still use geolocation software on the condition they first seek permission to install it, and notify the customer when it is activated -- unless a police report has been filed or they have a “reasonable basis” to believe the computer has been stolen.

The FTC will vote to approve the proposed settlement in late October.

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