The US Federal Trade Commission (FTC) has slammed seven retailers that used a covert spyware programme to monitor large numbers of PCs rented to customers, including logging keystrokes, recording personal data, and even taking webcam pictures of couples having sex.

The program used, PC Rental Agent, was intended to let shop owners to track the location of rented systems in the event they were stolen or, more likely, when customers failed to make monthly rental payments. A ‘kill switch’ could be activated to remotely disable the PC.

According to the FTC complaints, when put into ‘Detective Mode’ the software’s creators DesignerWare allegedly gathered a range of private data, including presenting a bogus ‘registration screen’ used to trick customers into providing contact details. This information was made available to the retailers.

Because it logged keystrokes, the software was able to collect sensitive information such as email passwords and user names, logins for websites, emails sent to doctors and even credit card details. To all intents and purposes what the companies had installed on each customer's PC was commercial spyware.

Webcam images collected included partially dressed people, children and even couples having sex, the FTC said.

“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,” said FTC chairman, Jon Leibowitz.

“The FTC orders today will put an end to their cyber spying,” he said.

“There is no justification for spying on customers.  These tactics are offensive invasions of personal privacy,” chimed FTC attorney General Lisa Madigan.

Because software maker DesignerWare and the retailers located around the US had acted illegally they would be monitored for compliance for 20 years. The use of Wi-Fi geo-location to track users’ PCs would be banned unless consent was given, the FTC said.

The stores involved – and any others using similar tactics – will now be prohibited from spying on customers using secret and deceptive programs as part of their business.

PC Rental Agent has been licensed to more than 1,617 US, Canadian and Australian stores and ended up installed on 420,000 PCs worldwide. The FTC complaint alleges that the software would not have been detectable to customers and could not easily be de-installed.