According to a recently filed lawsuit, a big rental chain installs physical hardware and software into its rented computers, capturing the keystrokes, screenshots, and even webcam images of unsuspecting customers. The only way to disable it is by waving an electronic “wand” over the device. The spyware was revealed when a store manager for the chain showed up at renter’s house to try to repossess the laptop and showed the renter a picture of him taken by the webcam, unbeknownst to him, by the leased laptop.

The renter who brought the lawsuit says that he had already paid in full on the laptop but the money was accepted by an employee who was later suspected for stealing customer’s payments.

According to the suit, inside the laptop were additional pieces of tracking hardware, like components soldered onto the motherboard. There was also software installed on the hard drive that allowed the rental chain complete keylogging, screenshot and webcam access.

“Crystal gets online before she gets a shower and checks her grades, Who knows? They could print that stuff off there and take it home with them,” the renter told AJC. “I’ve got a 5-year-old boy who runs around all day and sometimes he gets out of the tub running around for 20, 30 seconds while we’re on the computer. What if they took a picture of that? I wouldn’t want that kind of garbage floating around out there.”

You can see why a rental chain would want to keep track of its laptops, but if the tracking system wasn’t disclosed to the renters in advance, that’s a big problem, and the potential for abuse is huge.

The renter theorized that the manager had showed him the picture of himself in an attempt to bully him around and get him to hand the laptop back.

AP: Pa. lawsuit: Rental firm spies on users [AJC] (Thanks to Sean!)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.