Privacy & Information Security Law Blog

On October 22, 2013, the Federal Trade Commission announced a proposed settlement with Aaron’s, Inc. (“Aaron’s”) stemming from allegations that it knowingly assisted its franchisees in spying on consumers. Specifically, the FTC alleged that Aaron’s facilitated its franchisees’ installation and use of software on computers rented to consumers that surreptitiously tracked consumers’ locations, took photographs of consumers in their homes, and recorded consumers’ keystrokes in order to capture login credentials for email, financial and social media accounts. The FTC had previously settled similar allegations against Aaron’s and several other companies.

Aaron’s is a national “rent-to-own” retailer that allows consumers to rent, with an option to purchase, consumer goods including electronics. It has a national network comprised of both company-owned stores and independently franchised stores. In addition to facilitating installation and use of the spying software, the FTC alleged in its complaint that Aaron’s senior management and personnel responsible for the franchisees knew that the franchisees were using the spying software without notifying consumers. According to the complaint, Aaron’s facilitation of its franchisees’ surreptitious gathering of consumers’ private and confidential information is an unfair or deceptive trade practice in violation of Section 5 of the FTC Act.

The proposed settlement, which terminates in 2033, requires Aaron’s to:

• refrain from using monitoring technology on computers rented to consumers to collect data from or about consumers;
• prohibit its franchisees from surreptitiously gathering consumer data using practices prohibited by the settlement;
• collect affirmative consent from consumers before using geolocation tracking technology on any consumer product;
• refrain from making false representations to consumers regarding the collection of their personal information through a rented computer;
• destroy data collected using practices prohibited by the settlement;
• refrain from using data gathered by practices prohibited by the settlement to collect consumer debts;
• notify the FTC of any changes in structure that may affect its compliance with the settlement;
• deliver copies, and obtain signed acknowledgements, of the settlement to current and future Aaron’s principals, directors, officers, managers and principals of franchisees;
• submit reports to the FTC upon request that detail the manner and form of Aaron’s compliance with the settlement; and
• maintain documents related to the settlement.

The settlement is open for public comment until November 21, 2013.

Read the FTC Business Center Blog’s post about the Aaron’s settlement. The FTC’s Consumer Information Blog also posted about the settlement.

On March 11, 2014, the FTC approved the final settlement order with Aaron’s.