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Brown Signs Ban against Spying on Consumers Using Rent-to-own Computers

Gov. Jerry Brown has signed a bill sponsored by the Consumer Federation of California to protect consumer privacy by restricting the use of spyware on rented computers.

Thanks to Assembly Bill 2667 (Richard Bloom, D-Santa Monica), consumers who rent a computer or similar electronic device in California will not fall victim to the use of invasive privacy technologies by the merchant or manufacturer who sold the item. The Assembly and state Senate each approved the bill without opposition.

“Now that our legislation is signed, rent-to-own companies will no longer be able to use spyware to collect passwords and credit card and medical records, and to activate webcams on rented devices,” said Richard Holober, executive director of the Consumer Federation of California. “Consumers in California will now be protected against this unwarranted information gathering that makes consumers more vulnerable to identity theft and other fraud.”

The need for safeguards to protect consumers against egregious privacy violations has been documented by the Federal Trade Commission (FTC). On March 10, 2014, the agency issued its Final Order Settling Charges that Aaron’s Inc. Allowed Franchisees to Spy on Consumers via Rental Computers. The FTC had previously taken action against software manufacturer DesignWare LLC and seven rent-to-own companies, including Aaron’s, on this issue.

“Keystroke logs displayed usernames and passwords for access to email accounts, social media websites, and financial institutions. Screenshots captured additional confidential details, including medical information, applications containing Social Security numbers, and bank and credit card statements. Webcams operating secretly inside computer users’ homes took photographs of computer users and anyone else within view of the camera. These included images of minor children as well as individuals not fully clothed and engaged in intimate conduct,” according to the FTC.

“When consumers contract with rent-to-own retailers for a laptop or other electronic device, they are often unaware that these devices can contain invasive software,” Assembly Member Bloom said when his bill went to the governor. “This bill protects consumers from having their personal information, including photographs, financial information and medical records, taken without their knowledge or consent.”

The rent-to-own industry is big business, with a reported $8.5 billion in revenues. The ranks of its customers more than doubled between 2003 and 2012, to 6 million. Four in 10 earn under $24,000 – part of a vast, vulnerable population whose immediate needs exceed their weekly paychecks. With AB 2667, Californians will be better protected in the privacy of their homes.