Multiple companies accused by the Federal Trade Commission (FTC) of spying on customers around the world have agreed to settle with the consumer protection agency – although two of the involved businesses remain entangled in a separate civil lawsuit filed over similar privacy invasion allegations.
The FTC contended that Pennsylvania-based developer DesignerWare licensed software for rental computers that was capable of logging users' keystrokes, capturing screenshots and taking webcam pictures. The software was created for "rent-to-own" computer companies wanting to track their machines and disable them upon non-payment by customers.
But in a news release, the FTC said the software, called PC Rental Agent, was capable of gathering confidential information – including Social Security numbers; medical records and credentials for email accounts, banking institutions and social media sites, as well as taking webcam photos of computer users.The rent-to-own companies named in the complaint and resulting settlement are Aspen Way Enterprises, Watershed Development, Showplace Rent-to-Own, B. Stamper Enterprises, C.A.L.M. Ventures, J.A.G. Rents and Red Zone.
In addition to the FTC action, two of the involved businesses -- Aspen Way Enterprises and DesignerWare -- were sued in 2011 by a couple from Casper, Wyo., who found out about the spyware.
According to court documents, Brian and Crystal Byrd allege that they rented a laptop in 2010 from an Aaron's Aspen Way store in Casper. The Byrds were made aware of suspicious activity when a store employee came to their house to repossess the computer, and showed them a webcam photo of Brian Byrd, taken without his knowledge.
Aspen Way Enterprises, an independent franchisee of Aaron's, is still in an ongoing suit with the Byrds, while the DesignerWare case has been put on hold since the company filed in March for Chapter 11 bankruptcy.
According to the FTC, DesignerWare's PC Rental Agent software has been licensed to more than 1,600 rent-to-own stores in the United States, Canada and Australia since August 2011. The agency estimated that the software has been installed on approximately 420,000 computers worldwide.
A person who answered the telephone at DesignerWare on Thursday declined to comment. A number of the other companies named in the complaint could not be reached for comment.
On Tuesday, the FTC announced that it would ban DesignerWare and the named rent-to-own offenders from “using deception to gather any information from consumers,” and stop them from using suspicious, monitoring software.
The FTC will also monitor the defendants for the next 20 years to ensure their compliance.
“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,” Jon Leibowitz, chairman of the FTC, said in a statement. “The FTC orders today will put an end to their cyber spying.”
Claudia Farrell, a spokeswoman for the FTC, told SCMagazine.com on Thursday that no fines were assessed, as this is the first violation noted by the FTC.
“If the FTC charges a company of a violation of the FTC Act, which says that unfair or deceptive practices are prohibited, we can not seek civil penalties with a first offense,” Farrell said, adding that subsequent offenses can result in fines of $16,000 per day, per offense.