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updated 9/25/2012 5:46:08 PM ET 2012-09-25T21:46:08

A software firm and seven rent-to-own companies that allegedly colluded to spy on customers' computer activities will settle Federal Trade Commission charges of secretly collecting information and then using it as leverage to collect payments from customers who fell behind.

Beyond collecting screenshots, logging keystrokes and taking webcam pictures — all without customers' consent — the rental companies and DesignerWare, the software company named in the FTC's suit, installed software on rent-to-own computers with a "kill switch" that allowed the rental company to render the machines inoperable if customers failed to pay, the FTC said.

When they felt like snooping, the suit says, the rental companies could turn on spyware called "Detective Mode," which provided location details and even a fake software registration prompt for tricking users into giving up passwords and other personal information.

"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," Jon Leibowitz, chairman of the FTC, said in a statement on the agency's website

DesignerWare provided rental companies with different types of illegally obtained information, including email addresses and passwords for logging into social media accounts, Social Security numbers, bank and credit card statements, private emails and sensitive photos, the FTC said.

DesignerWare is charged with unfairly obtaining and disclosing information and illegally monitoring the location of rental customers without their knowledge and consent.

The FTC also alleges that DesignerWare broke the law when it provided rent-to-own businesses with the means to break the law. In the suit, the FTC charged that the fake registration form was deceptive.

The seven rent-to-own companies, Aspen Way Enterprises, Inc.; Watershed Development Corp.; Showplace Rent-to-Own; J.A.G. Rents, LLC; Red Zone, Inc.;  Premier Rental Purchase; and Premier Rental Purchase, were charged with secretly collecting consumer details to use as leverage to collect payments.

The details of the settlement were not immediately made clear.

Follow Ben on Twitter @benkwx.

© 2012 SecurityNewsDaily. All rights reserved

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