AB 2667 Update: State Settles with RTO Computer Firm over Consumer Protection Violations



Update: State Attorney General Kamala Harris this week announced a $28.4 million settlement with Aaron’s Inc.

“The complaint alleges that Aaron’s violated California state privacy laws by permitting its franchised stores to install spyware on laptop computers rented to its customers. A feature in the spyware program called ‘Detective Mode,’ which was installed without consumers’ consent or knowledge, allowed the Aaron’s franchisees to remotely monitor keystrokes, capture screenshots, track the physical location of consumers and even activate the rented computer’s webcam,” according to the announcement.

Other aspects of the recent settlement address improper late fees, excessive charges against customers who paid off contracts early, and other issues.

“Customers who believe they are eligible for restitution can … submit a claim by visiting www.rent-to-own-settlement.com or calling 877-449-8548,” the announcement says.

Gov. Jerry Brown last month signed CFC-sponsored Assembly Bill 2667 (Bloom) to expressly outlaw such computerized snooping in the rent-to-own computer industry in California, as the story below explains.

MAY 5, 2014 – No consumers should ever have to worry that their computers are spying in them – tracking their location, collecting sensitive personal, medical and financial records along with passwords and private photos, even turning on Web cams and transmitting images to remote servers, all without the knowledge or consent of the people being silently snooped on.

But it’s happened, and that’s why Consumer Federation of California is sponsoring Assembly Bill 2667 (Bloom) to curtail such activities on electronic devices marketed in the $8.5 billion “rent-to-own” (RTO) industry in the United States. The ranks of RTO customers more than doubled between 2003 and 2012, with four in 10 earning under $24,000 – part of a vulnerable population whose immediate needs exceed their weekly paychecks.

A 2012 Federal Trade Commission complaint “went so far as to state that the national rent-to-own retailer, Aaron’s, Inc., and DesignerWare, LLC, a software manufacturer, had secretly captured images of customers in their homes while they were ‘engaged in intimate activities,’ ” according to an Assembly Judiciary Committee analysis of AB 2667.

This Consumer Federation-sponsored legislation restricts the use of monitoring technology that’s so common, or easy to install, on electronic devices. AB 2667 has cleared two committee hearings and appears headed to a successful floor vote by the end of May, with prospects in the state Senate equally upbeat. There is no stated opposition.

“AB 2667 prohibits the use of monitoring technologies on rented electronic devices and restricts the use of GPS tracking technologies to fraud prevention purposes only,” Consumer Federation’s March 24, 2014, letter of support to the Assembly Judiciary Committee states. “AB 2667 ensures that customers are notified and consent to the installation of GPS tracking technologies for this purpose.”

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