The Federal Trade Commission announced late last month that it had settled a landmark case with seven rent-to-own companies and a software design firm for alleged consumer spying via laptop webcams, screenshots, and keystroke monitoring. This settlement is important because it marks the most expansive use by the FTC of its “unfairness” authority to pursue privacy violations. As privacy legislation has stalled in Congress in the short term, this latest action could signal more aggressive FTC action under its existing authority to reign in dubious privacy practices.
According to the complaint, the software company, DesignerWare, provided software to rent-to-own franchises that rented laptops to consumers. The software was designed to allow franchises to shut off computers remotely if the rental contract had been breached – for example, if customers failed to make timely payments or if they stopped communicating with the franchise.
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