Oct 082012
 October 8, 2012  Posted by  Breaches, Business, Court, Featured News, Surveillance

Mathew J. Schwartz reports on the recent consent order between the FTC, DesignerWare, LLC and some of the companies that allegedly used PC Rental Agent software to spy on unknowing consumers.  You can read his coverage on InformationWeek.

Actually, I’m surprised that there haven’t been more potential class action lawsuits filed over this spyware.  Given how litigious our society is, why haven’t more people sued over the use of spyware that may have captured their sensitive information or caught them via web cam in intimate activities? Tech lawyer Eric Goldman was as surprised as I was last year when a judge refused to issue an injunction.  I wonder if he’s as surprised as I am by the lack of civil suits. Despite some of the hurdles Eric outlines in litigating this type of lawsuit, I think it’s one of the few potential class action lawsuits I’ve seen where I felt a lawsuit was not only justified but badly needed to make it clear that such conduct by businesses is illegal and totally unacceptable.

As I noted previously, the Byrds’ lawsuit against Aaron’s, Aspen Way, and DesignerWare continues, although DesignerWare was dropped after filing for bankruptcy.  I did find a second civil suit, filed by Deborah and Eric McLean in the Middle District of Alabama against Aaron’s, HPH Investments, and DesignerWare, and have uploaded a copy of McLean v. Aaron’s here.  In that case, the plaintiffs discovered the spyware after returning the computer to HPH Investments (an Aaron’s franchise) for repairs. When it was returned to them, they allegedly discovered a disc in the CD drive containing the PC Rental Agent software.

According to their complaint, HPH Investments initially denied using spyware, but when told that the McLean’s were in possession of the disc proving their claim, demanded its return.

The McLean’s lawsuit, filed in December 2011, was voluntarily dismissed in January 2012.   HPH Investments was not one of the companies involved in the FTC settlement, and it’s not clear to me why the customers voluntarily dismissed the suit, although they withdrew it without prejudice. I’ve reached out to their attorney to try to find out why they dismissed their suit, but he was not immediately available for comment.

As I’ve mentioned before, and as Schwartz highlights in his coverage, the FTC does not have the authority to fine businesses for their first violation of the FTC Act. They can only impose monetary fines for subsequent offenses, e.g., if they breach a consent decree.  Any company, therefore, that used PC Rental Agent in Detective Mode but wasn’t part of the settlement will not incur any penalties for egregious privacy violations unless they are successfully sued by affected consumers.


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