Aaron's Inc., the nation's second-largest chain of rent-to-own appliance and furniture stores, agreed to pay $28.4 million to settle allegations that it violated California consumer privacy and protection laws by allowing software that secretly monitored consumers to be installed on rental computers, according to regulators.

The Atlanta-based retailer allegedly overcharged customers, left out important contract disclosures and installed software that could track the keystrokes of people who rented computers and even activate webcams or microphones to record users.

The ability to remotely monitor keystrokes meant they could capture login credential for email accounts and financial and social media sites, the authorities charged. Customers were unaware and hadn’t consented to the tracking.

The settlement, filed in Los Angeles County Superior Court, requires Aaron's to refund $25 million to an estimated 100,000 customers in California who had signed lease agreements between April 1, 2010, and March 31. The company will pay another $3.4 million in civil penalties and fees, California Attorney General Kamala D. Harris said in a statement.

Aaron’s didn’t admit wrongdoing or liability as part of the settlement, company officials said.

"Aaron’s, Inc. and its franchisees are committed to ensuring that our business practices in California and everywhere meet or exceed both legal requirements and the expectations of our customers," spokeswoman Garet Hayes said in a written statement.

The company settled similar computer spying charges with the Federal Trade Commission last year.

That complaint alleged that Aaron’s knew about the privacy-invasive features of the software, but nonetheless allowed its franchisees to access and use the software, known as PC Rental Agent. Aaron’s also stored data collected by the software for its franchisees and also transmitted messages from the software to its franchisees.

The software was the subject of related FTC actions in 2013 against the software manufacturer and several rent-to-own stores, including Aaron’s franchisees, that used it. It included a feature called Detective Mode, which, along with monitoring keystrokes, capturing screenshots and activating the computer’s webcam, also presented deceptive "software registration" screens designed to get computer users to provide personal information.


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