FTC admits laptop firms spied on users, stole private data & took photos


Seven rent-to-own companies and a software maker are settling charges with the Federal Trade Commission that rental computers illegally used spyware that took “pictures of children, individuals not fully clothed, and couples engaged in sexual activities.”

As per the course, the FTC slapped the hand of DesignerWare of North East Pennsylvania and the rent-to-own companies. The settlement, announced Tuesday, only requires them to halt using their spy tools, which has been employed on as many as 420,000 rentals.

The software, known as Detective Mode, didn’t just secretly turn on webcams. It “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,” according to the complaint.

Under the settlement, the companies can still use tracking software on their rental computers, so long as they advise renters, the FTC said. The companies include Aspen Way Enterprises Inc.; Watershed Development Corp.; Showplace Inc., doing business as Showplace Rent-to-Own; J.A.G. Rents LLC, doing business as ColorTyme; Red Zone Inc., doing business as ColorTyme; B. Stamper Enterprises Inc., doing business as Premier Rental Purchase; and C.A.L.M. Ventures Inc., doing business as Premier Rental Purchase.

Claudia Bourne Farrell, an FTC spokeswoman, said in a telephone interview the agency does not have jurisdiction when it comes to criminal offenses. She said the agency, when it believes criminal conduct may have occurred, will forward that to the appropriate agencies. But the agency, she said, has a policy against disclosing when it has done so.

“We don’t have criminal authority. We only have civil,” she said.

The companies were not fined, she said, because “we don’t have the authority to impose civil fines for the first violation of the FTC Act.”

The software installed on the laptops also enables the companies to automatically disable computers of renters behind on monthly payments and to secretly track the computers’ whereabouts.

Even more evil, the rental stores would force a fake popup for software registration on computers they rented. The window would not go away, the FTC said, until the computer user typed their contact information, including address, phone number and e-mail. The rent-to-own store would use that information “to try to collect money” from renters in arrears, the FTC said.

In all, private data obtained through the spyware included user names and passwords for e-mail accounts, social media websites and financial institutions. Also snagged were Social Security numbers, medical records, private e-mails to doctors, bank and credit card statements and webcam pictures of children, partially undressed individuals, and intimate activities at home, the FTC said.