EDITORIAL NOTE: The black colored text below is taken from an FTC Press Release. I also provide my thoughts and comments in the format of comments from the peanut gallery, or perhaps as a patent attorney equivalent to Mystery Science Theater 3000. In order to differentiate my thoughts/comments from the FTC statement, my comments are italicized, colored, indented and tagged with the IPWatchdog logo.
Aaron’s, Inc., a national, Atlanta-based rent-to-own retailer, has agreed to settle FTC charges that it knowingly played a direct and vital role in its franchisees’ installation and use of software on rental computers that secretly monitored consumers including by taking webcam pictures of them in their homes.
According to the FTC’s complaint, Aaron’s franchisees used the software, which surreptitiously tracked consumers’ locations, captured images through the computers’ webcams – including those of adults engaged in intimate activities – and activated keyloggers that captured users’ login credentials for email accounts and financial and social media sites.
MY TAKE: This is absolutely ridiculous! It is hard to understand why someone is not going to jail over this type of activity. How could anyone in their right mind think this was acceptable on any level? I don’t want to seem alarmist, but this really bothers me. We are increasingly living in a world where privacy does not exist. If we tolerate this when the government does it (i.e., NSA) and we tolerate it when a private corporation illegally spies, do we really have any expectation of privacy at all any more? Does the 4th Amendment have any relevance in America today for the great majority of American’s who are law abiding citizens?
“Consumers have a right to rent computers free of cyberspying and to know when and how they are being tracked by a company,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “By enabling their franchisees to use this invasive software, Aaron’s facilitated a violation of many consumers’ privacy.”
The complaint alleges that Aaron’s knew about the privacy-invasive features of the software, but nonetheless allowed its franchisees to access and use the software, known as PC Rental Agent. In addition, Aaron’s stored data collected by the software for its franchisees and also transmitted messages from the software to its franchisees. In addition, Aaron’s provided franchisees with instructions on how to install and use the software.
MY TAKE: So this was knowing and intentional action on the part of Aaron’s and their franchisees! Absolutely wonderful! I can understand that a rental company like Aaron’s has some reason to track the geographical location of things that they rent to prevent theft, but I can’t for the life of me understand the collection of e-mail passwords and using webcams to spy on renters. If an individual set up a hidden camera in a house or apartment unknown to the occupant they would go to jail.
The software was the subject of related FTC actions earlier this year against the software manufacturer and several rent-to-own stores, including Aaron’s franchisees, that used it. It included a feature called Detective Mode, which, in addition to monitoring keystrokes, capturing screenshots, and activating the computer’s webcam, also presented deceptive “software registration” screens designed to get computer users to provide personal information.
Under the terms of the proposed consent agreement with the FTC, Aaron’s will be prohibited from using monitoring technology that captures keystrokes or screenshots, or activates the camera or microphone on a consumer’s computer, except to provide technical support requested by the consumer.
In addition, Aaron’s will be required to give clear notice and obtain express consent from consumers at the time of rental in order to install technology that allows location tracking of a rented product. For computer rentals, the company will have to give notice to consumers not only when it initially rents the product, but also at the time the tracking technology is activated, unless the product has been reported by the consumer as lost or stolen. The settlement also prohibits Aaron’s from deceptively gathering consumer information.
The agreement will also prevent Aaron’s from using any information it obtained through improper means in connection with the collection of any debt, money or property as part of a rent-to-own transaction. The company must delete or destroy any information it has improperly collected and transmit in an encrypted format any location or tracking data it collects properly.
Under the agreement, Aaron’s will also be required to conduct annual monitoring and oversight of its franchisees and hold them to the requirements in the agreement that apply to Aaron’s and its corporate stores, and to terminate the franchise agreements of franchises that do not meet those requirements.
MY TAKE: Do you notice what is not included in the consent agreement? No fines of any kind. Not only is no one going to go to jail for this widespread and intentional invasion of privacy, but the company and the franchisees are not even going to be fined by the FTC. Aaron’s and their franchisees intentionally engaged in this conduct that clearly stepped across all acceptable lines and not even a fine. How does that make any sense?
MY TAKE: I am typically a fan of the Federal Trade Commission. I don’t like them looking into patent matters, particularly when there seems to be a political agenda being pushed down from the top, but it is hard not to notice the typically thorough and swift justice they provide to consumers who are dupped and scammed. Frankly, I wish more of government operated like the FTC. Still, as much as I think the agency is a clear overall positive to the economy and consumers specifically, I think not throwing the book at Aaron’s and their franchisees is a tremendous mistake.
The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Nov. 21, 2013, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in electronic form should be submitted online by following the instructions on the web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.