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FTC And PC Rental Companies Settle In Spying On Users Case 80

Posted by Unknown Lamer
from the just-when-ubuntu-was-about-to-sign-up dept.
SternisheFan writes with news of a settlement in a case of Rent-to-Own firms grossly violating the privacy of their customers. From the article: "Seven rent-to-own companies and a software developer have settled federal charges that they spied on customers, ... The companies captured screenshots of confidential and personal information, logged keystrokes, and took webcam pictures of people in their homes. Their aim was to track the computers belonging to customers who were behind with their payments. '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,' says FTC chairman Jon Leibowitz. 'The FTC orders today will put an end to their cyber spying.' Developer DesignerWare produced the software that was used to gather the information, PC Rental Agent. The package included a 'kill switch' designed to disable a computer of it was stolen, or if payments weren't made. However, an add-on program called Detective Mode could log key strokes, capture screen shots and take photographs using a computer's webcam, says the FTC in its complaint (PDF)."
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FTC And PC Rental Companies Settle In Spying On Users Case

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  • So that's who wrote Flame and Stuxnet.....

  • ...does that stuff run in Linux? And if it doesn't, should I complain about reduced quality of service? I feel discriminated against!
  • The FTC orders today will put an end to their cyber spying

    New! Regulatory hot-air with built-in enforcement!

  • by adosch (1397357) on Wednesday September 26, 2012 @09:02AM (#41462829)

    I've never personally used a rent-to-own service, but I can't imagine it's much fun when your marketed crowd is people who can't afford things outright, then specifically deadbeats who have zero intention of ever buying it and will go to great lengths to try and keep your merchandise.

    But there's some shady about this whole story that just doesn't make a lot of sense. Why on earth would a rent-to-own company have a whole development team designing all this for them? I think there was a bit of wrongful intent on the company to want to try and steal some PII; maybe not use it themselves, but sell that information, sure.

    Now being tied up with a legal battle, it's now easy for their lawyers to pull out the scapegoat that it was all about protecting their investment and assets. As much as I buy that, that's what the repo-man makes a living for. And if you're losing that many computer assets of non-payment or delinquency, then start selling bottom-line PCs and bring some pimple-faced Best Buy let-go in to oversell and dramatize the hell out of them for you. Or better yet, just stop selling them altogether.

    • by h4rr4r (612664)

      I wonder if maybe they were making a little extra scratch selling browsing history or something. Still seems like this software goes to far for that though.

      • The whole racket is shady as fuck from top to bottom, would you really be surprised to find out they were up to no good with this data?
    • Having worked in revenue assurance, the largest classes of dead beats are the elderly and small business owners. The number of actual dead beat dead beats out there, is fairly small. Since utilities have to provide, by law, to virtually every one, and virtually everyone need at least one of gas or electricity, this isn't an anecdotal sample.
  • But where are the penalties for breaking the law? Bad boy don't do it again just isn't good enough.
    And the fake registration scam, wouldn't that be considered malware?
  • by Sponge Bath (413667) on Wednesday September 26, 2012 @09:07AM (#41462887)
    In the age of new $400 laptops, who rents a computer for home use? Rental companies (furniture, appliances, etc) are like payday loan companies: their sole purpose is to prey on the poor and uninformed. The profit is in penalties and reclaiming the product to lease to the next sucker. These transactions are designed to fail and trap the unsuspecting.
    • by ledow (319597) on Wednesday September 26, 2012 @09:35AM (#41463185) Homepage

      As someone who has, quite literally, had to tear the sofa apart to find enough pennies for the cheapest loaf of bread in the shop so my girlfriend and I could eat that week, ONLY IDIOTS.

      I've been in very undesirable financial positions both through faults of my own and not, and I tell you that I never once rented an appliance or gadget. Lots of companies have the same kind of "penalty" for not having money, starting with banks for instance. That's not the problem here - the problem is IDIOTS who rent an unnecessary gadget.

      Firstly, they are among the FIRST things you give up on and sell off. Honestly. They are not a necessity, and if you can afford the money to keep a broadband connection going, you're not desperate enough to rent a machine to run on it. TV, PC, phone. Get rid of them. If you haven't, you're not "in trouble", you're just temporarily "skint/broke" which is another thing entirely.

      Secondly, if you have to rent one, you have to work out how much it costs and it ALWAYS costs you more to rent rather than buy outright (like any of those "pay weekly" catalogues and anything else of that nature). Hell, from some places, it's cheaper to get a loan on an item of jewellery (and even just one of those pay-day) and pay back the loan+interest than it is to rent or even lease a PC.

      Thirdly, if you're in that position, and you do think you NEED to RENT a LAPTOP for whatever reason, you're an idiot. You can save money by going to the library and using theirs.

      If you can't do that, take up an old PC from a boot sale or ask companies/schools that are throwing them out. Hell, you'll learn Linux rather than pay £200 Windows tax on a machine if it actually mattered. But, again, you don't really need a PC and if you do, you "need" an Internet connection much more for half the reasons those type of people state (e.g. "saving money on energy suppliers", etc. - you will NOT save enough money to buy a laptop and always-on connection, so don't give me that crap).

      But a laptop, especially, is not required - if your job requires you to have roaming access from anywhere, they will pay for it. The only reason to have a laptop over a PC is absolute necessity for the task at hand (and thus will be provided), or complete narcissism. They are more expensive, less durable, less powerful and more expensive to repair.

      I have little sympathy for those who rent such things, or even those who rent basic appliances. What sympathy I have is only for their intrusion of privacy, not for their situation.

      My mum rented a TV for 30 years (different models, but basically the same rental) until one broke once and the company gave us hassle, and my brother and I worked out how much we'd spent on it. It was enough to re-buy a new TV every two years over that period and still have money left over. We'd quite literally have had 15-20 fully-working TV's (even after accidents, breakages, etc.) somewhere in the house if we'd put the same money into a box and bought a TV whenever it was enough.

      The TV went back and we bought a new TV the same day, which last 5 years until dad changed it for another one for the price of what would have been 1 years rental (and there was nothing wrong with the 5-year-old one either and went to my brother's house).

      Renting appliances is stupid. Even renting houses is stupid but that's an order of magnitude more expensive and buying a house requires a credit history and, thus, you can see that not everyone will ever be able to buy rather than rent. But renting, you are just pissing your money away and paying off someone else's mortgage for them, plus 10%. And, yes, I rented for many years.

      Renting cars? You're insane. Renting appliances? God, shoot me now.

      Everybody: If you find yourself renting objects because you "can't afford it", if you find yourself paying into Christmas clubs because "you can't afford it", if you find yourself signing contracts for monthly payments because "you can't afford to buy it" and then try to

      • by vlm (69642)

        But renting, you are just pissing your money away and paying off someone else's mortgage for them, plus 10%.

        Especially during the bubble, but still in many locations, it does not work like that. Usually renting is cheaper than owning.
        Its been a decade+ since you can profit by renting money from the bank vs renting a house from a loanowner.

        Housing market is still controlled by speculators. When (if?) investors take over, then you'll be able to buy for less than renting.

        Its not much different than stocks. When you hear "dotcoms only go up" just like "house prices only go up" and people buy purely on hope of spec

      • by CastrTroy (595695)
        I agree with everything you say, except the part about laptops being more expensive. Compared to a desktop, complete with a screen, mouse, and keyboard, you would probably pay more for the desktop. You can get a netbook for $200 [futureshop.ca]. That's good enough to send a few emails, browse the web, write up a resume and find yourself a better job. Plus you can carry it around, which means that you can go to the public library, coffee shop, or McDonald's and use their internet connection so you don't have to pay for
      • by operagost (62405)
        Well, I might agree that leasing a car is stupid for most people, but that's not the same as RENTING one, which is a necessity for most airline travel.
        • by jeko (179919)

          I suspect the poster is talking about a long-term auto lease, which is a notoriously poor financial decision, as opposed to renting a car for a few days.

      • Last time I looked at the cost to rent from Rent a Center some 20 years ago, I calculated that the amount spent to rent-to-own would be about 3 times the price to buy the item. I never looked again since. And I agree. These stores are just preying on the ill informed.
        • by jjhall (555562)

          About 15 years ago I checked into renting a stereo VCR (these weren't all that common yet) to copy some VHS tapes. We had one stereo and one mono in our house. All I wanted to do was rent the machine for a week. By the time I would have paid the initiation fee, the 3 month minimum rental fee, and some other charge I don't even remember now, I was $25 away from going out to the electronics store to buy one brand new. In the end I decided to just go buy one and I gave away our older mono deck to a friend

      • Even renting houses is stupid

        That's hardly a universal truth. Setting aside that renting in the US would have paid off handsomely in the last half dozen years, in many parts of the world renting make more sense.

        In my own situation I pay ~US$320 a month for a modest three bedroom home. I could buy the house. The owner wants ~US$96,000. Why in the world would I buy it when I can rent it for a third of a percent of that?
        (and that's the norm. The owner's asking price and rent are in line with the market a

        • by TheSpoom (715771)

          Why in the world would I buy it when I can rent it for a third of a percent of that?

          While that is a pretty good rent for such a house, the answer is that you could mortgage it over 20 years or so... *does back of envelope calculations* for about $700 a month, and have at least some of your money build equity. That means you're ultimately paying yourself, not your landlord, and at the end you can quit paying and continue living in the house (or sell it and move up). Of course, it all depends on the situation. If you're not planning on living there for a long time, renting can be more pra

          • by jeko (179919)

            $320/month lease, $700/month mortgage. You'll lose money either to rental costs, or (mortgage interest + mortgage insurance + taxes - mortgage tax deductions). The deciding numbers would be at the end of 20 years, does the equity in the home exceed the value of the $380/month savings you've been banking and investing for 20 years? In some cities right now, the equity is more. In other cities, the investment account is more.

          • by ewibble (1655195)

            Firstly its 4% p.a. (still quite good) not 0.33% (from the grandparent) (maybe per month but interest rates are usually stated in p.a.) but renting a house is a bit different to a computer. You are not paying double the value of the house every couple of years. You have to balance that against the interest (or profit on investment) you would have earnt on the money, the interest rate you have to pay on the mortgage, maintenance, how much the value of the house will appreciate/depreciate .... Sometimes it d

            • In real estate the back of the envelope calculation is comparing monthly rent to the cost, which is why I used it. In the US 1% is more typical, and I doubt you'd find 0.33% anywhere. In my case, a 4% return *before* expenses is just plain awful. Taxes and maintenance would eat most of that that up, not to mention the opportunity cost. The freedom to cleanly walk away with nothing more than a 30 day notice is worth quite a bit.
        • After renting for 30 years you have accomplished nothing. You own nothing. The money is gone. What are you going to do when you are too old and infirm to afford that $320 monthly payment? Buying a house is investing in your own financial future. In the end you will have a tangible asset.
      • "But a laptop, especially, is not required - if your job requires you to have roaming access from anywhere, they will pay for it."

        That's simply not the case in this economy, and not just at the bottom. I've done consulting stints for companies making a thick percentage, and the company issued laptop was unusable, as was most of the it infrastructure. The days where companies had to pay the sinews of work, are gone. Just be glad to have a job is the new mantra.

        "Renting cars? You're insane."

        Risk to capi

      • by AC-x (735297)

        Renting cars? You're insane

        I disagree. If you use a car daily then yes you'd be better off getting a cheap 2nd hand car, but if you use one for just a few weekends a year then owning becomes the insane choice and renting much cheaper (at least in the UK where you have road tax and mandatory annual safety checks to pay).

      • by Ceseuron (944486)

        I agree with most everything here, except for two points.

        First off, car renting is not an insanity. I do own a car, which I take obsessively good care of. In situations where I don't want the mileage, wear and tear, and fuel expenses of my "not-so-fuel-efficient" Mustang GT, I will opt to rent a car. I did it not too long ago for a 350 mile drive (one way) and I'll be renting another car again when I fly for a business trip.

        Secondly, renting a house isn't a stupid idea. I've done the "American Dream" routin

      • Buying a home is something that is a good idea, but only in some circumstances. If you don't meet the circumstances, then renting is a good idea since you need to have some place to live. Basically you need to:

        1) Be able to afford it. You can nearly always find a rental for less than it costs to buy. If you can't afford the mortgage payments on a normal 30 year fixed mortgage, then owning is a bad idea.

        2) Be willing to stay for 5 years or more. Buying costs money. If you buy a house and leave soon after, yo

  • What if the users explicitly agreed to this spying in their rental contracts?

    • Nobody has time to read all that lawyer-spewn horseshit, not even lawyers. And the lawyers only look at it when they decide they want a way to weasel out of whatever they "agreed" to.
      EULAs, along with forcing everybody to accept arbitration just goes to show how rotten our system has become. If you're going to rob me, at least have the courtesy of sticking a gun in my face so I have reasonable cause to remove you from the gene pool.
      • by TheSpoom (715771)

        Why would it have to be a click-through EULA? I would imagine at these rental places, they actually have to sign honest-to-God on-paper contracts anyway.

        • There is, still, and just barely, a notion of an unconscionable contract. All contracts that depend on the legal force of society to maintain, goes this old notion, cannot be so unfair as to shock the conscience.

          I know, back in the day when we were the people, rather than the billing units.

    • by vlm (69642)

      What if the users explicitly agreed to this spying in their rental contracts?

      Contracts written by lawyers but signed by the illiterate? You're not dealing with educated customers, or even trained customers.

      Also there are plenty of "rights" you categorically cannot sign away in a contract. Its not as simple as Disney movie magic where the evil witch can write anything on a piece of paper and once the victim signs it, it has to happen that way.

      Also there's usually a lemon law provision. Renting something you know is not private enough to use online for medical and financial transac

      • by TheSpoom (715771)

        Contracts written by lawyers but signed by the illiterate? You're not dealing with educated customers, or even trained customers.

        OK, so at the top of the contract:

        "If you do not pay us on time, we reserve the right to spy on you and your use of our laptop."

        I think that's obvious enough for anyone, and if they're really illiterate enough that that can't be understood, they can't really enter into contracts, can they?

        Mostly I'm trying to come at this from the point of view of the rental company because they'll probably be going through the same thought process. I don't believe what they did is right, but I'm wondering if, given the pe

        • People who run stores in the path of the coming riots shouldn't engage in business practices liable to encourage them. It's a bad risk profile.
          • by Jiro (131519)

            The fact that the people renting such things may riot is taken into account in the price of the rental--the rental company charges enough that they'll make a profit even given the possibility of riots (or charges enough that they can buy insurance to compensate them in the event of a riot, which amounts to the same thing). I would imagine that's one of the reason the prices seem like ripoffs in the first place: they know very well that their customers may riot and destroy everything, and they have to charg

        • by vlm (69642)

          OK, so at the top of the contract:

          "If you do not pay us on time, we reserve the right to spy on you and your use of our laptop."

          No you missed the part of my comment

          Also there are plenty of "rights" you categorically cannot sign away in a contract. Its not as simple as Disney movie magic where the evil witch can write anything on a piece of paper and once the victim signs it, it has to happen that way.

          If you want, you can write on an apartment rental contract that if you don't pay your rent, the landlord will record your daughter showering and upload the videos to youtube, but that will never hold up in court. Any time you try to trickily redefine common concepts or break traditional rules you're in for a trail of tears in the legal system.

          The worst part is at least theoretically the people who's privacy is getting violated are not even necessarily the people who sign

      • Now if they marketed it as a gaming and (free-)pr0n appliance rather than a general purpose PC, then maybe...

        Careful about marketing it as free pr0n: the thing has a webcam, so you might end up unwittingly "producing" as much porn as you'll watch...

        • by vlm (69642)

          Now if they marketed it as a gaming and (free-)pr0n appliance rather than a general purpose PC, then maybe...

          Careful about marketing it as free pr0n: the thing has a webcam, so you might end up unwittingly "producing" as much porn as you'll watch...

          And if there's any minors in the house, that's an even bigger problem for the monitors.

    • What if the users explicitly agreed to this spying in their rental contracts?

      Basic Contract Law would disallow this. Contracts are only valid when they are legal, mutual and entered into freely by people capable of a "meeting of minds." Contracts between two people of unequal understanding are void on their face. This is why you can't make contracts with children, the intoxicated or people of unsound mind. This is why the Courts generally protect "unsophisticated investors" from financial cardsharps, and why they take a very dim view of certain types of auto dealers who try to sell

  • Direct your outrage (Score:4, Informative)

    by onyxruby (118189) <onyxrubyNO@SPAMcomcast.net> on Wednesday September 26, 2012 @09:28AM (#41463077)

    Direct your outrage on this on to the people who let them get away with this. They settled for no fines or penalties. When the watchers let the scumbags get off with a slap on the wrist the message is clear.

    • by amoeba1911 (978485) on Wednesday September 26, 2012 @09:46AM (#41463307) Homepage

      What slap on the wrist? There was no slap on the wrist at all, they had to pay no fines, no punishment. I'm not sure how they got away with this.

      This is gross invasion of privacy. A slap on the wrist would be a small fine, or some monetary award to their customers... or at the very least a letter of apology to their customers. No, they didn't get a slap on the wrist, they got the equivalent of: "you should stop doing that".

      Here's how I see it: you rent a room or house to someone, and install cameras to watch the person doing private things, record all their phone calls... you get caught.... the police come over and say "you should stop doing that" and they leave. There is not even a slap on the wrist, this is simply unacceptable. Who did they bribe to get this?

      • by onyxruby (118189)

        You have a point, I'm not sure you could even call this a slap on the wrist. My point was to direct outrage appropriately.

    • by DM9290 (797337)

      Direct your outrage on this on to the people who let them get away with this. They settled for no fines or penalties. When the watchers let the scumbags get off with a slap on the wrist the message is clear.

      They basically let them off with a warning! No fines. nothing but a promise not to do it again. That is even less than a slap on the wrist.

    • 1 declare all RTO agreements "completed" AND refund all payments made (so the victim keeps the computer)

      2 have a third party service the machine and declare BY COURT ORDER that the "spy" software was removed completely

      3 the company must file a document stating that any and all files/logs or other records from this software have been deleted from company systems (to include any contractors or any company the information has been disclosed to)

      4 all computers rented from this point on must have a highly visibl

  • by Anonymous Coward

    http://www.youtube.com/watch?feature=player_embedded&v=T17XQI_AYNo

    Lest we forget the phone software on HTC handsets that among other things logged keystrokes, captured app usage etc. They denied it, the security researcher showed it logging passwords in into a file, captured SMS's web pages visited, intercepted the location data even if you refuse it to a website etc.. He also points out it has permissions to record audio, read messages, read keys, read the contacts list, web pages visited, even HTTPS p

  • Did the rental companies operate in multiple states? I thought most of these rental places were just one-store deals.

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