Penalty Amount
$3,400,000
The California Attorney General reached a $28.4 million settlement with Aaron's, Inc. for installing spyware on rented computers without customer consent and for violating the Karnette Rental-Purchase Act. The spyware, called 'Detective Mode', allowed remote monitoring of keystrokes, screenshots, location, and webcam activation. Aaron's must refund $25 million to approximately 100,000 customers and pay $3.4 million in penalties, and is prohibited from using spyware.
Aaron's must refund $25 million to eligible California customers, pay $3.4 million in civil penalties and fees, and is prohibited from installing or using spyware on rented computers. The company must also fully comply with the Karnette Rental-Purchase Act.
In-house legal teams should review all customer rental-purchase agreements and any related vendor contracts for clauses addressing software monitoring, data collection, and customer consent. Specifically, examine provisions on remote access, surveillance, keystroke logging, screenshot capture, location tracking, and webcam activation to ensure they require explicit, informed consent before any such activities and include clear opt-out mechanisms. Update contracts to prohibit spyware like 'Detective Mode' and ensure compliance with the Karnette Rental-Purchase Act. Consider adding data retention schedules, breach notification clauses, and privacy policy references to mitigate risks from unauthorized data collection and potential mishandling.
Entity
Aaron's, Inc.
Also known as: Aaron's
Industry
RetailOfficial Press Release
Aaron's complaint
https://oag.ca.gov/system/files/attachments/press_releases/Aaron%27s%20complaint.pdf
Aaron's Conformed Stipulation for Entry of Final Judgment
https://oag.ca.gov/system/files/attachments/press_releases/Aaron%27s%20Conformed%20Stipulation%20for%20Entry%20of%20Final%20Judgment.pdf
California Attorney General Enforcement Page
https://oag.ca.gov/privacy/privacy-enforcement-actions
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