(CN) - A company dealing in rent-to-own computers must face claims about software that takes secret photographs and captures keystrokes, a federal judge ruled.
Leslie Arrington signed a rent-to-own contract for a personal laptop computer with ColorTyme Inc. and its franchisee, CMG Rentals LLC, in Clarkston, Wash., on March 31, 2011.
She claims that the Rent-A-Center subsidiary had secretly installed on the computer an "invisible or generally undetectable" program called PC Rental Agent, "which could monitor [Arrington] in her home, and intercept her private communications."
The program, manufactured by the now defunct Pennsylvania-based DesignerWare, automatically logs in at a WiFi hotspot while its "detective mode" component secretly gathers photos, keystrokes and screenshots that is then transferred to the franchisee, in this CMG, according to the complaint.
CMG can allegedly "cause Detective Mode to record data every two minutes until prompted to stop doing so." As long as it leaves the program on, CMG gets emails about the collected data from DesignerWare, Arrington says.
ColorTyme gave franchisees access to DesignerWare via a link on its message board, as well as email sent through its corporate server, according to the complaint.
DesignerWare, in turn, allegedly provided the franchisees with routine customer service.
Arrington says she never consented to the software's installation, and that upon information and belief, CMG and ColorTyme took images of her remotely and stole her private communications.
She hopes to represent a class in the complaint against ColorTyme, CMG, and 100 other franchisees under the Electronic Communications Privacy Act (ECPA). Arrington also seeks damages and declaratory relief for invasion of privacy, conspiracy, and aiding and abetting.
ColorTyme and CMG moved to dismiss, but U.S. District Judge Cathy Bissoon in Pittsburgh denied the motions Sept. 17.
"Although DesignerWare's software and servers facilitated the acquisition and transmission of plaintiff's communications, CMG allegedly set the process in motion," Bissoon wrote. "The complaint further alleges that DesignerWare, according to its arrangement with CMG, would then forward this information to CMG at its designated email accounts through ColorTyme's servers, who provided its franchisees access to PC Rental Agent in the first place and facilitated its use. These allegations, if true, would subject CMG and ColorTyme to liability under the ECPA for procuring DesignerWare's services in intercepting plaintiff's private communications."
CMG also failed to convince the court that it lacks subject-matter jurisdiction to hear the case.
"Because the complaint's allegations regarding plaintiff's private communications are sufficient to plead the occurrence of an 'intercept' under the ECPA, the federal cause of action survives, regardless of whether the screenshots, keystrokes and webcam photographs were in transmission," Bissoon wrote. "Furthermore, given the sophistication of the technology at issue, it is entirely possible that discovery will reveal that the screenshots, keystrokes and pictures were in some state of 'transmission' as envisaged by the statute when they were obtained by PC Rental Agent.
Rent-A-Center Inc., ColorTyme's parent, reported $3.083 billion in revenue in 2012.