They're climbing in your window, they're monitoring you on your webcam... so hide your kids, hide your wife...  (Source: YouTube)

The Byrds were shocked to discover their newly purchased computer had been photographing them for months. They filed a lawsuit in Pennsylvania court.  (Source: The Casper Star-Tribune, Dan Cepeda, Associated Press)

Aaron's Inc. claims that it does not routinely install the monitoring software on computers at its 1,140 stores across the U.S. and Canada. It did not, however, clarify how many franchisees might be doing this (the store in question was a franchisee). The software spies on customers, recording screenshots, seeing what they type, and taking webcam pictures of them.  (Source: Flickr)
Class action lawsuit against Aaron's Inc. is pending

Crystal and Brian Byrd were a hard working couple, but like many people in today’s economy, money was tight.  So when they wanted a new computer they turned to popular rent-to-own chain Aaron's Inc. (AAN) to affordably purchase a new system.  Picking a Dell Inspiron, they were happy and productive -- but they would soon make a disturbing discovery.

I. Big Brother -- Your Local Store Manager -- is Watching You

After entering a rent-to-own contract on the laptop in early 2010, the couple completed their last payment in October 2010, a month ahead of schedule.  But Mr. Byrd fortuitously made a mistake in his payment submission resulting in Aaron's never logging it as received.

In December, the store manager showed up at the couple's house with an order to repossess the computer.  And he carried with him a far more disturbing item -- a picture taken from the computer's web cam inside the couple's home, which Aaron's had been using as a remote spy cam.  He claimed the picture was "evidence".

The Byrds were appalled and called the police.  A police investigation revealed that Aaron's employees "routinely installed the PC Rental Agent" on rent-to-own laptops.  The PC Rental Agent, a product of DesignerWare, was capable of regularly taking pictures of users, taking screenshots, and logging their key presses -- all without the user ever realizing it.

II. The Byrds File Suit

The Wyoming couple has filed a lawsuit [PDF] in US District Court for the Western District of Pennsylvania.  Their lawyers are seeking to gain class action status for the suit.

In an Associated Press interview, Mr. Byrd said his primary concern is for his wife and child's safety and privacy.  He states, "Crystal gets online before she gets a shower and checks her grades. Who knows? They could print that stuff off there and take it home with them. I've got a 5-year-old boy who runs around all day and sometimes he gets out of the tub running around for 20, 30 seconds while we're on the computer. What if they took a picture of that? I wouldn't want that kind of garbage floating around out there."

The computer involved in the case currently remains in police custody.  And Aaron's has thus far refused to comment on how or why it spies on its customers.

The company has 1,140 stores in the U.S. and Canada and made $123.6M USD in calendar 2011.  So a class action lawsuit involving all of the chain's computer-buying customers has the potential to be huge.

III.  How Strong is the Case?

The law is hardly black and white on the issue of companies remotely monitoring customers.  But legal precedent seems to be on the Byrds' side.

similar lawsuit was filed in 2010 by parents of children in the Lower Merion School District of Pennsylvania.  The school district had issued laptops to its 2,300 students as part of a high-tech initiative, but packed them with remote monitoring software, capable of turning on the webcam and taking shots.

The district maintained that the feature was only activated when a laptop was recorded missing or stolen.  And it said the service successfully led to the recovery of 28 laptops.

But facing a firestorm of legal and public scrutiny, the district agreed to remove the remote monitoring software and settle two lawsuits for $610,000 USD.

By contrast, the Aaron's case appears even stronger.  The Lower Merion School District at least informed parents in their contract that they were being monitored.  It does not appear that Aaron's does so with its customers.

Furthermore, the school district, despite in effect losing (settling), provided a wealth of evidence that the remote monitoring features were used sparingly and responsibly.  It remains to be seen if the same is true for Aaron's.

Updated: Wednesday May 4, 2011 9:50 a.m. -

Aaron's has released a statement.

It writes:

Aaron's, Inc....said today that a lawsuit filed by a Wyoming couple regarding a violation of privacy relating to a computer they rented from an Aaron's franchise store is without merit against Aaron's, Inc.

The Company believes that none of its over 1,140 Company-operated stores have used the product developed or provided by PC Rental Agent or Designerware LLC, the two vendors named in the lawsuit, and neither vendor is approved or have done any business with Aaron's, Inc.

Aaron's, Inc. respects its customers' privacy and has not authorized any of its corporate stores to install software that can activate a customer's webcam, capture screenshots, or track keystrokes. The named plaintiffs leased the computer at issue from an independently owned and operated franchisee. Aaron's, Inc. intends to vigorously defend itself against these allegations.

It still remains unclear how many franchisees of Aaron's Inc. are using the software, even if the company's claims are substantiated.  

The store in question was also reportedly decorated to appear like a first-party Aaron's store, so the case still raises significant questions for customers -- who likely will be unable to determine between some first-party and franchise outlets.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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