Sep 252012
 

In May 2011, I started blogging my concerns about software called PC Rental Agent by DesignerWare, LLC.  The software allowed remote surveillance and data collection on unsuspecting customers who had rented computers from some rent-to-own firms.  The lawsuit against Aaron’s that made me aware of the issue did not garner as much media attention as I had anticipated, much to my surprise, and I was disappointed that a federal court declined to issue an injunction stopping the data collection. Not surprisingly, perhaps, Aaron’s denied the allegations in the lawsuit and claimed there was no privacy issue.

I was therefore pleasantly surprised today to see that the FTC has settled a complaint against DesignerWare, LLC  and seven firms that used their software, including franchisees of Aaron’s, ColorTyme, and Premier Rental Purchase.

According to the complaint against DesignerWare:

Since at least 2007, DesignerWare has made available to PC Rental Agent licensees an add-on program, Detective Mode. Through DesignerWare, rent-to-own stores can cause Detective Mode to be installed and activated on any computer with PC Rental Agent without telling the computer’s renter. DesignerWare limits access to the Detective Mode function to one “Master Account Holder” designated by the licensee. DesignerWare does not charge licensees extra for the use of Detective Mode, nor does DesignerWare sell the program separately from PC Rental Agent.

Once installed and activated, Detective Mode can log the keystrokes of the computer user, take screen shots of the computer user’s activities on the computer, and photograph anyone within view of the computer’s webcam. Detective Mode secretly gathers this information and transmits it to DesignerWare, who then transmits it to the rent-to-own store from which the computer was rented, unbeknownst to the individual using the computer.

[...]

DesignerWare’s collection and disclosure to third parties of private and confidential information about consumers, including both those who rented the computer and those who are merely using it, causes or is likely to cause substantial harm to consumers. Because of DesignerWare’s intrusions, consumers are at risk of harm from the exposure of personal, financial account access, and medical information to strangers. Consumers are harmed by DesignerWare’s unwarranted invasion into their homes and lives and its capture of the private details of individual and family life, including, for example, images of visitors, children, family interactions, partially undressed individuals, and couples engaged in intimate activities. Sharing these images with third parties can cause consumers financial and physical injury and impair their peaceful enjoyment of their homes. Consumers cannot reasonably avoid these injuries because PC Rental Agent is invisible to them. The harm caused by respondents’ unauthorized collection and disclosure of confidential consumer information is not outweighed by countervailing benefits to consumers or to competition; indeed in this context, where rent-to-own stores have alternate effective methods of collection, including, e.g., using PC Rental Agent to remotely disable the computer, there are no legitimate benefits to respondents or to the public.

You can find more documents and case files on the FTC’s site. According to their news release:

The proposed settlement orders will ban the software company and the rent-to-own stores from using monitoring software like Detective Mode and will ban them from using deception to gather any information from consumers. They also will prohibit the use of geolocation tracking without consumer consent and notice, and bar the use of fake software registration screens to collect personal information from consumers. In addition, DesignerWare will be barred from providing others with the means to commit illegal acts, and the seven rent-to-own stores will be prohibited from using information improperly gathered from consumers in connection with debt collection. All the proposed settlements contain record keeping requirements to allow the FTC to monitor compliance with the orders for the next 20 years.

And if you’re wondering what happened to the potential class action lawsuit filed by Crystal and Brian Byrd against Aaron’s, Aspen Way (an Aaron’s franchisee) and DesignerWare, LLC over this surveillance, well, it’s still ongoing, but DesignerWare LLC was dropped from the suit in March. A docket entry for the case indicates:

ORDER the Court having been advised that the defendant, DesignerWare, LLC., has filed for bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania, (Case No. 12-10397), and that no further action can be taken against him at this time. IT IS HEREBY ORDERED that no action will be taken against defendant, DesignerWare, LLC., and that this case be administratively closed as to this defendant. Nothing contained in this order shall be considered a dismissal or disposition of this matter. Should further proceedings against defendant DesignerWare, LLC., become necessary or desirable, any party may initiate it in the same manner as if this order had not been entered. Signed by Judge Sean J. McLaughlin on 3/20/12.

The plaintiffs filed a second amended complaint against Aaron’s and Aspen Way Enterprises on September 14th. Now that Aaron’s/Aspen Way Enterprises have settled with the FTC, will they also settle this lawsuit? It would seem prudent.

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