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Tampa rent-to-own company denies using software to spy on customers

LUTZ — A local rent-to-own company has been ordered to stop using software capable of spying on customers' key strokes, pirating passwords, stealing personal records and operating webcams, though the company maintains it never used the equipment to those ends.

The company, J.A.G. Rents LLC of Tampa, which operates a ColorTyme franchise at Florida and Bearss avenues, was among seven forced to settle with the Federal Trade Commission on charges that they used spyware without the knowledge of their customers.

The spyware program, a product of DesignerWare LLC, allowed its licensees to track computer users' every move. This meant access to Social Security numbers, passwords, financial and medical records, private emails and webcams that recorded unwitting customers' intimate moments at home, according to the FTC.

It also presented a fake software program registration screen that tricked consumers into providing their personal contact information, government officials said.

Engaging in this kind of information-gathering without the knowledge or consent of customers is in violation of federal law, government officials said.

J.A.G. admitted to licensing the spyware for features that enable the company to shut down computers of individuals who weren't making payments and locate computers that are lost or stolen. But, they said, no one at J.A.G. used the software to spy on customers.

"J.A.G. activated the detective mode about 20 times over the course of three years and only did so on those occasions when the computer was reported as stolen," company attorney Woody Webb said. "In a lot of cases the customer was glad to try and locate it because they're on the hook for payments, so they were as anxious as the company."

But using this tracking feature without informing customers still violated the FTC's rule against spying on customers to settle debts.

J.A.G. owner John Fornero said consumers were told about the lock-down feature and warned that the company could disable the computer if payments weren't made.

His ColorTyme store, nestled in the corner of a strip mall, deals in much more than computers. Sofas, refrigerators, televisions and other appliances take up most of the space in the store, with laptops displayed in a small nook at the side of the shop.

Typically, Fornero said, the store issues notices to customers who are late on payments and threatens legal action if necessary. After all, you can't shut down a sofa.

But laptops pose different problems, Fornero said.

There have been cases where customers' computers are stolen or lost. In these cases, Fornero said, the software enabled the company to lock the computer, preventing whoever stole the computer from accessing information.

"We saw it as a solution to identity theft in those cases," he said. "Our mission was always to protect the customer. There were a lot of features of this software that we never utilized."

The settlement bars J.A.G. and other companies from using this software or any like it in the future. Computers with lock-down features are still allowed, though customers must be told what they're renting.

"We're going to have to monitor it pretty carefully," Webb said. "But having been through these proceedings for the past year, I doubt very seriously any of these companies would be enticed into doing it again."

Franchises of Aaron's and Premier Rental Purchase were also named in the case.

The FTC is accepting public comment on the settlement for the next 30 days at www.ftc.gov.

Marissa Lang can be reached at mlang@tampabay.com or (813) 226-3386 or on Twitter @Marissa_Jae.

Tampa rent-to-own company denies using software to spy on customers 09/27/12 [Last modified: Thursday, September 27, 2012 5:41pm]
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