Privacy & Information Security Law Blog

On October 14, 2014, rent-to-own retailer Aaron’s, Inc. (“Aaron’s”) entered into a $28.4 million settlement with the California Office of the California Attorney General related to charges that the company permitted its franchised stores to unlawfully monitor their customers’ leased laptops.

The settlement stems from a complaint filed on October 7 in the Superior Court of California County of Los Angeles by the Attorney General of California. The complaint accused Aaron’s of violating its California customers’ constitutional right to privacy when it “turned a blind eye as its franchisees installed spyware on computers rented to unsuspecting customers.” The complaint also accused Aaron’s of violating California’s unfair business practices law by making false and misleading statements in advertisements and by engaging in unlawful billing and rental practices.

Under the settlement, Aaron’s agreed to refund $25 million to California consumers who leased laptops from the company’s franchised stores between April 1, 2010 and March 31, 2014, and to pay $3.4 million in civil penalties and fees. The company also agreed not to use any monitoring technology on its customers’ leased computers without appropriate notice and consent.

In October 2013, Aaron’s entered into a settlement agreement with the FTC over similar charges that the franchisor knowingly assisted its franchisees in spying on consumers. And last month, Vermont’s Attorney General reached a settlement with one of the company’s franchisees, SEI/Aaron’s, Inc., over charges that the franchisee’s spying activities violated Vermont’s debt collection laws.