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FTC settles spying charges on rent-to-own computers

Software recorded 'intimate activities at home'

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The US Federal Trade Commission (FTC) has settled a case against a software vendor and seven rent-to-own PC sellers over charges that they illegally spied on customers.

According to the settlement, software company DesignerWare sold an application for sellers of rent-to-own PCs that would enable them to brick computers that were stolen or if the user stopped making rental payments. It also included a feature called "Detective Mode" which would log keystrokes, allow remote use of a webcam, or record the geographical location of systems.

The software is installed on around 420,000 computers in circulation in the US, and seven PC rental companies named in the suit used it on their systems. But the scope of the software's reach and the fact that customers were not informed it was installed broke the rules, according to the FTC.

"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 in a statement. "The FTC orders today will put an end to their cyber spying."

The sheer depth of data such systems recorded unsettled the FTC, as it included user names and passwords for email accounts, social media websites, and financial institutions; Social Security numbers; medical records; private emails to doctors; bank and credit card statements; and webcam pictures of children, partially undressed individuals, and intimate activities at home.

You could argue that the computer rental firms have a perfect right to protect their property from theft or delinquent customers by installing such software. Where the rental firms overstepped the mark was by not making it clear to customers that this software was installed and what it could record.

The FTC ruled that the software is illegal, and has ordered an end to its use by DesignerWare and the seven rental firms using it: Aspen Way Enterprises, B. Stamper Enterprises, C.A.L.M. Ventures, J.A.G. Rents, Red Zone Investment Group, Showplace and Watershed Development Corp. ®

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