In Re FACEBOOK INTERNET TRACKING LITIGATION

Filing 73

STATEMENT OF RECENT DECISION pursuant to Civil Local Rule 7-3.d PLAINTIFFS NOTICE OF STATEMENT OF RECENT DECISIONS RELEVANT TO MOTION TO DISMISS PLAINTIFFS CORRECTED FIRST AMENDEDED CONSOLIDATED CLASS ACTION COMPLAINT; PLAINTIFFS REQUEST FOR LEAVE filed byPerrin Aikens Davis, Brian K. Lentz, Cynthia D. Quinn, Matthew J. Vickery. (Related document(s) # 54 ) (Kiesel, Paul) (Filed on 3/21/2014)

1
2
3
4
5

Paul R. Kiesel (SBN 119854)
[e-mail]
KIESEL LAW LLP
8648 Wilshire Blvd.
Beverly Hills, CA 90211-2910
Telephone: [phone]
Facsimile: [phone]
Liaison Counsel

6
7
8
9

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

10
11
12
13
14
15

Case No.: 5:12-MD-02314-EJD
IN RE: FACEBOOK INTERNET
TRACKING LITIGATION

PLAINTIFFS’ NOTICE OF STATEMENT OF
RECENT DECISIONS RELEVANT TO MOTION
TO DISMISS PLAINTIFFS’ CORRECTED FIRST
AMENDEDED CONSOLIDATED CLASS ACTION
COMPLAINT; PLAINTIFFS’ REQUEST FOR
LEAVE

16
17

Judge: The Honorable Edward J. Davila
Court Room: 4

18
19
20

On July 2, 2012, Defendant Facebook, Inc. (“Facebook”) filed a Motion to Dismiss Plaintiffs’

21

Corrected First Amended Consolidated Class Action Complaint (“Motion”) [Dkt. 44]. On October, 5,

22

2012, this Court heard argument on Facebook’s Motion and took the matter under submission

23

[Transcript, Dkt. 60]. On October 10, 2013, Defendant Facebook filed a notice of new authority and

24

requested leave to have the new authority considered when ruling on the Motion [Dkt. 69]. On October

25

11, 2013, Plaintiffs filed a separate notice of new authority and similarly requested leave to have the

26

new authority considered [Dkt. 70]. Subsequent to these notices, two additional decisions have been

27

issued (or declassified) that bear directly on the Motion:

28

PLAINTIFFS’ NOTICE OF NEW AUTHORITY AND REQUEST FOR LEAVE
CASE NO.: 5:12-MD-02314-EJD

1

Exhibit A:

On November 18, 2013, at the direction of President Obama, Director of National

2

Intelligence James R. Clapper declassified a partially-redacted undated opinion of the

3

Foreign Intelligence Surveillance Court, known as “Opinion of the FISC Granting

4

Government’s Application Seeking to Re-instate NSA’s Bulk Electronic

5

Communications Metadata Program.” On pages 32-33 of the opinion, the FISC held that

6

“in some circumstances a URL can also include ‘contents’ as defined in [the Wiretap

7

Act]” (citing In re: Pharmatrak, Inc., 329 F.3d 9, 16, 18 (1st Cir. 2003) (“URLs including

8

search terms are ‘contents’ under [the Wiretap Act]”)). This ruling relates to Facebook’s

9

argument that “a URL, to the extent it is even a ‘communication,’ is not ‘content.’”

10
11

Motion, p. 14.
Exhibits B and C: In the Matter of Aaron’s, Inc., Federal Trade Commission Docket No. C-4442. The

12

FTC charged that the surreptitious gathering of private and confidential personally

13

identifiable information (“PII”) from rented computers caused “actual harm” which was

14

neither “trivial nor speculative” despite the lack of any out-of-pocket losses. See Exhibit

15

B, complaint dated March 10, 2014, para. 16. The Commission, by a 4-0 vote, accepted a

16

settlement and explicitly found “jurisdiction of the subject matter of this proceeding.”

17

See Exhibit C, Commission decision and order dated March 10, 2014, p. 2. This finding

18

relates to Facebook’s theory that actual out-of-pocket losses are required in order to

19

establish subject matter jurisdiction over claims related to the theft of PII. Motion, p. 8.1

20

Plaintiffs seek leave to provide these decisions as supplemental authority for the Court’s consideration

21

when deciding the Motion.

22
23
24
25
26
27
28

1

The Plaintiffs’ alternative argument, that the Complaint does in fact plead out-of-pocket loss, is not
addressed by the decision of the FTC in In the Matter of Aaron’s, Inc.
PLAINTIFFS’ NOTICE OF NEW AUTHORITY AND REQUEST FOR LEAVE
CASE NO.: 5:12-MD-02314-EJD

1

Dated: March 21, 2014

Respectfully Submitted,

2
3
4
5
6
7
8
9
10
11
12
13
14
15

KIESEL LAW LLP
By:
/s/ Paul R. Kiesel
Paul R. Kiesel (SBN 119854)
[e-mail]
8648 Wilshire Blvd.
Beverly Hills, CA 90211-2910
Telephone: [phone]
Facsimile: [phone]
Liaison Counsel
BARTIMUS, FRICKLETON, ROBERTSON &
GOZA, P.C.
By:
/s/ Jim Frickleton
James P. Frickleton
[e-mail]
11150 Overbrook Road, Suite 200
Leawood, KS 66211
Telephone: [phone]
Facsimile: [phone]

16
17
18
19
20

Stephen G. Grygiel
[e-mail]
88 E. Bergen Place
Red Bank, NJ 07701
Telephone: [phone]
Facsimile: [phone]

21

Plaintiffs’ Executive Committee

22

KAPLAN, FOX & KILSHEIMER LLP

23

27

By:
/s/ David A. Straite
David A. Straite (admitted pro hac vice)
[e-mail]
850 Third Avenue
New York, NY 10022
Telephone: [phone]
Facsimile: [phone]

28

Plaintiffs’ Steering Committee

24
25
26

3
PLAINTIFFS’ NOTICE OF NEW AUTHORITY AND REQUEST FOR LEAVE
CASE NO.: 5:12-MD-02314-EJD

EXHIBIT A

EXHIBIT B

122 3264
UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS:

Edith Ramirez, Chairwoman
Julie Brill
Maureen K. Ohlhausen
Joshua D. Wright

In the Matter of
AARON’S, INC., a corporation.

)
)
)
)
)
)

DOCKET NO. C-4442

COMPLAINT
The Federal Trade Commission, having reason to believe that Aaron’s, Inc., has violated
the provisions of the Federal Trade Commission Act, and it appearing to the Commission that
this proceeding is in the public interest, alleges:
1.
Respondent Aaron’s, Inc., (“Aaron’s” or “respondent”), is a Georgia corporation
with its principal office or place of business at 309 E. Paces Ferry Road, N.E., Atlanta, Georgia
30305. Aaron’s is a national “rent-to-own” (“RTO”) retailer of consumer electronics, residential
furniture, and household appliances. RTO retailers allow consumers to rent goods with an option
to purchase them.
2.
The acts and practices of respondent as alleged in this complaint have been in or
affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission
Act.
RESPONDENT’S BUSINESS PRACTICES
3.
Aaron’s does business through a network of more than 1,300 company-owned
stores and 700 independently owned franchised stores that operate across the United States.
Since at least 2009 through January 2012, some Aaron’s franchisees licensed a software product
known as PC Rental Agent from DesignerWare, LLC (“DesignerWare”) and installed it on
computers rented to consumers. Aaron’s knew that some of its franchisees had installed PC
Rental Agent on computers rented to consumers because, among other things, Aaron’s provided
these stores with the technical capacity to access and use PC Rental Agent, as detailed below.
Company-owned Aaron’s stores did not license or use PC Rental Agent.
Page 1 of 5

4.
When installed on a rented computer, PC Rental Agent enabled Aaron’s
franchisees to disable a computer remotely. PC Rental Agent also enabled Aaron’s franchisees
to remotely install and activate an add-on program called Detective Mode. Using Detective
Mode, Aaron’s franchisees could – and did – surreptitiously monitor the activities of computer
users, including by logging keystrokes, capturing screenshots, and using the computer’s webcam.
Through Detective Mode, Aaron’s franchisees could – and did – secretly gather consumers’
personal information using fake software registration windows. In addition, using a different PC
Rental Agent feature, Aaron’s franchisees tracked the physical location of rented computers
using WiFi hotspot location information. Aaron’s franchisees used this illicitly gathered data to
assist in collecting past-due payments and recovering computers after default.
5.
Detective Mode data sent to Aaron’s franchisees revealed private, confidential,
and personal details about consumers using rented computers. Keystroke logs displayed
usernames and passwords for access to email accounts, social media websites, and financial
institutions. Screenshots captured additional confidential details, including medical information,
applications containing Social Security numbers, and bank and credit card statements. Webcams
operating secretly inside computer users’ homes took photographs of computer users and anyone
else within view of the camera. These included images of minor children as well as individuals
not fully clothed and engaged in intimate conduct. The presence of PC Rental Agent was not
detectible to computer users and computer renters could not uninstall it. In numerous instances,
Aaron’s franchisees did not obtain consent from their rental customers and did not disclose to
them or the rental computers’ users that PC Rental Agent was installed and could be used to
track consumers’ physical locations and remotely spy on their activities.
6.
To use PC Rental Agent and activate Detective Mode, Aaron’s franchisees needed
to access DesignerWare’s website and direct PC Rental Agent to take the desired action.
Aaron’s franchisees also needed to provide DesignerWare with an email address to which
DesignerWare could send data captured by Detective Mode. DesignerWare forwarded
immediately all data collected by Detective Mode to the email address provided by the Aaron’s
franchisee. Because at one activation level Detective Mode would capture screen shots, log
keystrokes, and take webcam pictures every two minutes that the computer was connected to the
Internet until directed to stop, and because this data was contemporaneously emailed to the
Aaron’s franchisees requesting it, Detective Mode activations often generated an enormous
volume of data.
7.
Aaron’s requires its franchisees to have company-provided, Aarons.com email
addresses. Aaron’s also provides these franchisees with email accounts and server space to store
email messages. Such email messages are routed through Aaron’s corporate headquarters and
stored on computer servers owned, controlled, and maintained by Aaron’s. Under the franchise
agreement that governs each Aaron’s franchisee, Aaron’s may terminate a franchisee that
breaches any Aaron’s policy or practice or that violates federal, state, or local laws, regulations,
or ordinances. In addition, Aaron’s policies and training materials for franchisees prohibit
“unlawful” computer and Internet use, and set standards for fair collection practices.
Page 2 of 5

8.
Aaron’s protects its computer network with certain security features.
DesignerWare’s website, through which Aaron’s franchisees needed to access PC Rental Agent
and activate Detective Mode, did not interface smoothly with Aaron’s network configurations.
In numerous instances, Aaron’s franchisees had to seek written permission from Aaron’s to
access the DesignerWare website so that they could use PC Rental Agent. Senior Aaron’s
management approved these requests and authorized franchisees to access the DesignerWare
website using the Aaron’s network. Absent this permission, many Aaron’s franchisees could not
have used PC Rental Agent, activated Detective Mode, and surreptitiously monitored consumers’
activities on rented computers.
9.
Aaron’s also provided its franchisees with trouble-shooting advice relating to
installation of PC Rental Agent software on rental computers. Technical conflicts between PC
Rental Agent and the antivirus program already installed on computers in rental inventory
prevented franchisees from readily installing PC Rental Agent. Aaron’s published step-by-step
instructions for installing PC Rental Agent on Aaron’s rental computers in a newsletter for
franchisees and posted those instructions on its website.
10.
In numerous instances, Aaron’s franchisees used the Aaron’s computer network
to access the DesignerWare website, and then, often using instructions provided by Aaron’s,
installed PC Rental Agent on computers rented to consumers. Aaron’s franchisees directed
DesignerWare to send Detective Mode data to the email accounts provided to them by Aaron’s.
Aaron’s computer network was used to receive, store, and access upwards of 100,000 Detective
Mode messages, including messages containing private and confidential consumer information
about consumers who rented computers from Aaron’s franchisees. Aaron’s has stored such
messages on its computer network since at least 2009.
11.
Aaron’s knew that Detective Mode captured confidential and personal
information from consumer computer users without notice to those users. Aaron’s IT personnel
were aware that company server space was being used to store Detective Mode emails and knew
what data those emails contained. One IT employee who reviewed Detective Mode images sent
to a franchisee described the program as “very intrusive” in an email to Aaron’s chief
information officer.
12.
Aaron’s employees responsible for franchisee development and oversight,
“franchise representatives,” also knew that Aaron’s franchisees were installing PC Rental Agent
and using Detective Mode without notice to consumers. Franchise representatives discussed PC
Rental Agent with franchisee employees, via email and in-person, including at Aaron’ssponsored conferences attended by franchisee employees where PC Rental Agent was an agenda
item. Some franchisee employees first heard about PC Rental Agent from Aaron’s franchise
representatives. Through these communications, Aaron’s employees also learned about the
privacy-invasive capabilities of Detective Mode. For example, one franchisee owner suggested
to an Aaron’s franchise representative that PC Rental Agent use be put on the agenda for an
upcoming meeting in part because he said he was “a little uncomfortable with the ability to see
the customer through the webcam.”
Page 3 of 5

13.
Beginning at least in 2010 and throughout 2011, Aaron’s senior corporate
management not only knew that its franchisees were using PC Rental Agent and activating
Detective Mode without notice to computer users, they also knew that data and information
gathered by Detective Mode could be highly intrusive and invaded consumers’ privacy. Aaron’s
managers specifically discussed whether to purchase PC Rental Agent for installation on Aaron’s
corporate-owned stores. As part of that discussion, Aaron’s reviewed the use of PC Rental
Agent by some of its franchisees, as well as Detective Mode’s capabilities. Among other things,
managers received email communications that included examples of images captured by
Detective Mode. Ultimately, Aaron’s decided not to purchase PC Rental Agent for its corporate
stores.
14.
Aaron’s management learned even more about PC Rental Agent and Detective
Mode when, in May 2011, Aaron’s was sued by a franchisee customer who alleged that an
Aaron’s franchisee’s use of Detective Mode invaded her privacy and violated state and federal
law. The lawsuit, which also named the Aaron’s franchisee and DesignerWare, was styled as a
class action. The complaint described, inter alia, the alleged properties of Detective Mode,
including its capacity to capture computer users’ keystrokes, screenshots of their computer
activities, and webcam images.
15.
Aaron’s did not close its web portal and revoke franchisee access to the
DesignerWare website and Detective Mode emails until December 2011. Following that action
by Aaron’s, its franchisees that used Aaron’s network could no longer receive and view emails
from DesignerWare containing Detective Mode-captured data about their customers. Aaron’s
computer servers received the last Detective Mode email in January 2012. Aaron’s failed to act
earlier despite clear authority to control its franchisees’ access to and use of Aaron’s computer
network.
16.
Aaron's conduct in permitting and participating in the gathering and storage of
private and confidential information about individuals caused or was likely to cause substantial
harm to consumers. Because of Aaron's actions, private and confidential information was
captured, stored on Aaron's computer system, and revealed to Aaron's franchisees. This conduct
placed consumers at risk from the exposure of their personal, financial account access, and
medical information. Consumers also were injured by the unwarranted invasion into the
peaceful enjoyment of their homes. Detective Mode's surreptitious capture of the private details
of individual and family life – including images of visitors, children, family interactions,
partially undressed individuals, and people engaged in intimate conduct – caused actual
consumer harm. Because Detective Mode functioned secretly, consumers were unable to
reasonably avoid this harm, which was neither trivial nor speculative. Further, the harm caused
by the knowing and unauthorized gathering and storage of private and confidential information is
not outweighed by countervailing benefits to consumers or to competition.

Page 4 of 5

VIOLATION OF THE FTC ACT
17.
Through the means described in Paragraphs 3 through 16, respondent’s actions have
caused or are likely to cause substantial injury to consumers that cannot be reasonably avoided
and is not outweighed by countervailing benefits to consumers or competition. Therefore,
respondent’s practices constitute unfair acts or practices in violation of Section 5 of the FTC Act,
15 U.S.C. § 45(a).
THEREFORE, the Federal Trade Commission, this tenth day of March, 2014, has
issued this complaint against respondent.
By the Commission.

Donald S. Clark
Secretary

Page 5 of 5

EXHIBIT C

122 3264

UNITED STATES OF AMERICA
BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS:

Edith Ramirez, Chairwoman
Julie Brill
Maureen K. Ohlhausen
Joshua D. Wright

In the Matter of
AARON’S, INC., a corporation.

)
)
)
)
)
)

DOCKET NO. C-4442

DECISION AND ORDER
The Federal Trade Commission (“Commission”) having initiated an investigation of
certain acts and practices of the respondent named in the caption hereof, and the respondent
having been furnished thereafter with a copy of a draft complaint that the Bureau of Consumer
Protection proposed to present to the Commission for its consideration and which, if issued by
the Commission, would charge the respondent with violation of the Federal Trade Commission
Act, 15 U.S.C § 45 et seq.; and
The respondent, its attorney, and counsel for the Commission having thereafter executed
an Agreement Containing Consent Order (“Consent Agreement”), which includes: a statement
by respondent that it neither admits nor denies any of the allegations in the draft complaint,
except as specifically stated in the Consent Agreement, and, only for purposes of this action,
admits the facts necessary to establish jurisdiction; and waivers and other provisions as required
by the Commission’s Rules; and
The Commission having thereafter considered the matter and having determined that it
has reason to believe that the respondent has violated the Federal Trade Commission Act, and
that a complaint should issue stating its charges in that respect, and having thereupon accepted
the executed consent agreement and placed such consent agreement on the public record for a
period of thirty (30) days, and having duly considered the comments filed thereafter by interested
persons pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34, now in further conformity with the
procedure prescribed in Commission Rule 2.34, the Commission hereby issues its complaint,
makes the following jurisdictional findings and enters the following order:
Page 1 of 10

1.
Respondent Aaron, Inc. (“Aaron’s”), is a Georgia corporation with its principal
office or place of business at 309 E. Paces Ferry Road, N.E., Atlanta, Georgia 30305.
2.
The Commission has jurisdiction of the subject matter of this proceeding and of
respondent, and the proceeding is in the public interest.
ORDER
DEFINITIONS
For purposes of this Order, the following definitions shall apply:
1.
and assigns.

Unless otherwise specified, “respondent” shall mean Aaron’s and its successors

2.
“Commerce” shall be defined as it is defined in Section 4 of the Federal Trade
Commission Act, 15 U.S.C. § 44.
3.
“Computer” shall mean any desktop or laptop computer, handheld device, tablet,
smartphone, or other electronic product or device that has a platform on which to download,
install, or run any software program, code, script, or other content.
4.

“Clear(ly) and prominent(ly)” shall mean:

a.
In textual communications (e.g., printed publications or words displayed
on the screen of a computer or mobile device), the required disclosures are of a type, size,
and location sufficiently noticeable for an ordinary consumer to read and comprehend
them, in print that contrasts highly with the background on which they appear;
b.
In communications disseminated orally or through audible means (e.g.,
radio or streaming audio), the required disclosures are delivered in a volume and cadence
sufficient for an ordinary consumer to hear and comprehend them;
c.
In communications disseminated through video means (e.g., television or
streaming video), the required disclosures are in writing in a form consistent with subpart
(a) of this definition and shall appear on the screen for a duration sufficient for an
ordinary consumer to read and comprehend them, and in the same language as the
predominant language that is used in the communication;
d.
In communications made through interactive media, such as the Internet,
online services, and software, the required disclosures are unavoidable and presented in a
form consistent with subpart (a) of this definition, in addition to any audio or video
presentation of them; and
Page 2 of 10

e.
In all instances, the required disclosures are presented in an
understandable language and syntax; in the same language as the predominant language
that is used in the communication; and include nothing contrary to, inconsistent with, or
in mitigation of any statement contained within the disclosure or within any document
linked to or referenced therein.
5.
“Consumer product” shall mean any item that is primarily for personal, family, or
household use.
6.
“Covered rent-to-own transaction” shall mean any transaction where a consumer
enters into an agreement for the purchase or rental of any consumer product where the
consumer’s contract or rental agreement provides for payments over time with options to
purchase the product.
7.
“Franchisee” shall mean an independently owned business that operates under a
franchise agreement with respondent.
8.
“Geophysical location tracking technology” shall mean any hardware, software,
or application that collects and reports data or information that identifies the precise geophysical
location of an item. Geophysical location tracking technologies include, but are not limited to,
technologies that report the GPS coordinates of a computer or other item; the WiFi signals
available to or actually used by a computer to access the Internet; the telecommunication towers
or connections available to or actually used by a computer; the processing of any such reported
data or information through geolocation lookup services; or any information derived from any
combination of the foregoing.
9.
“Monitoring technology” shall mean any hardware, software, or application
utilized in conjunction with a computer that can cause the computer to (1) capture, monitor, or
record, and (2) report information about user activities by:
a.
b.
or screen; or

Recording keystrokes, clicks, or other user-generated actions;
Capturing screenshots of the information displayed on a computer monitor

c.
Activating the camera or microphone function of a computer to take
photographs or record audio or visual content through the computer’s webcam or
microphone.

Page 3 of 10

INJUNCTION
I.
MONITORING TECHNOLOGY PROHIBITED
IT IS HEREBY ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with them who receive
actual notice of this order, by personal service or otherwise, in connection with any covered rentto-own transaction, are hereby permanently restrained and enjoined from:
A.
Using any monitoring technology to gather data or information from or about a
consumer from any computer rented to a consumer; or
B.
Receiving, storing, or communicating any data or information from or about a
consumer that was gathered from a computer rented to a consumer using any monitoring
technology.
Provided that this Part does not apply to respondent’s use of any monitoring technology
to gather data or information from or about a consumer from any computer rented to a consumer,
with notice to and consent from the consumer, in connection with a request for technical
assistance initiated by the consumer, where respondent only uses the information to provide, or
attempt to provide, the requested technical assistance and for no other purpose.
II.
USE OF TRACKING TECHNOLOGY LIMITED
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with them who receive
actual notice of this Order, by personal service or otherwise, in connection with any covered
rent-to-own transaction, are hereby permanently restrained and enjoined from:
A.
Gathering any data or information from any consumer product via any
geophysical location tracking technology without providing clear and prominent notice to the
consumer who rented the product at the time it is rented and also obtaining affirmative express
consent from the consumer at the time the consumer product is rented;
B.
Failing to provide clear and prominent notice to consumers and obtaining
affirmative express consent from consumers at the time any consumer product is rented, to the
extent that such notice and consent are required by subpart A, above, by the following means:

Page 4 of 10

1.
Clear and Prominent Notice: respondent shall provide a clear and
prominent notice to the user, separate and apart from any “privacy policy,” “data use
policy,” “terms of service,” “end-user license agreement,” “lease agreement,” or other
similar document, that discloses (1) that geophysical location tracking technology is
installed and/or currently running on the rented consumer product; (2) the types of user
activity or conduct that is being captured by such technology; (3) the identities or specific
categories of entities with whom any data or information that is collected will be shared
or otherwise provided; (4) the purpose(s) for the collection, use, or sharing of such data
or information; and (5) where and how the consumer can contact someone for additional
information; and
2.
Affirmative Express Consent: respondent shall obtain affirmative express
consent by giving the renter an equally clear and prominent choice to either agree or not
agree to any geophysical location tracking technology, and neither option may be
highlighted or preselected as a default setting. Activation of any geophysical location
tracking technology must not proceed until the renter provides affirmative express
consent. Notwithstanding the foregoing, nothing in this Section shall require respondent
to rent an item to a consumer who declines to consent to installation or activation of any
geophysical tracking technology; and
C.
In connection with the rental of computers, installing or activating on rented
computers geophysical location tracking technology where that technology does not provide
clear and prominent notice to the computer user immediately prior to each use of the geophysical
location tracking technology, as clear and prominent is defined above, and by the installation of a
clear and prominent icon on the computer on which the technology is installed, such as on the
desktop and in the desktop system tray of the computer. Clicking on the icon must clearly and
prominently disclose: (1) that geophysical location tracking technology is installed and currently
running on the computer; (2) the types of user activity or conduct that is being captured by such
technology; (3) the identities or specific categories of entities with whom any data or information
that is collected will be shared or otherwise provided; (4) the purpose(s) for the collection, use,
or sharing of such data or information; and (5) where and how the user can contact someone for
additional information.
Provided that respondent may suspend the notice requirements of this Part and activate
geophysical location tracking technology if a) the consumer reports that a rented consumer
product has been stolen or respondent otherwise has a reasonable basis to believe that a rented
consumer product has been stolen, and b) either the consumer or respondent has filed a police
report stating that the consumer product has been stolen. Provided further that respondent shall
retain documents establishing (a) and (b). For purposes of this Order, “filing of a police report”
means the filing of the consumer’s or respondent’s complaint with the police department in any
form recognized in the jurisdiction.

Page 5 of 10

Provided further that this Part does not apply to respondent’s use of geophysical location
tracking technology, with notice to and consent from a consumer to the extent that such notice
and consent are required by subpart A, to gather data or information in connection with a request
for technical assistance initiated by a consumer, where respondent only uses the information to
provide, or attempt to provide, the requested technical assistance and for no other purpose.
III.
NO DECEPTIVE GATHERING OF CONSUMER INFORMATION
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with them who receive
actual notice of this Order, by personal service or otherwise, in connection with any covered
rent-to-own transaction, are hereby permanently restrained and enjoined from making or causing
to be made, or assisting others in making or causing to be made, any false representation or
depiction in any notice, prompt screen, or other software application appearing on the screen of
any computer that results in gathering data or information from or about a consumer.
IV.
NO USE OF IMPROPERLY OBTAINED INFORMATION IN COLLECTIONS
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with them who receive
actual notice of this Order, by personal service or otherwise, are hereby permanently restrained
and enjoined from using, in connection with collecting or attempting to collect a debt, money, or
property pursuant to a covered rent-to-own transaction, any data or information from or about a
consumer obtained in a manner that does not comply with Parts I, II, and III of this Order.
V.
PROTECTION OF DATA
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with them who receive
actual notice of this Order, by personal service or otherwise, shall:
A.
Delete or destroy data or information from or about a consumer previously
gathered or stored using any monitoring or geophysical location tracking technology that does
not comply with Parts I, II, and III of this Order, unless such action is otherwise prohibited by
court order or other legal obligation and after the expiration of any such court order or other legal
obligation the information is deleted or destroyed; and

Page 6 of 10

B.
Only transfer any data or information from or about a consumer that was gathered
by any monitoring or geophysical location tracking technology from the computer upon which
the technology is installed to respondent’s server(s), and from the respondent’s server(s) to any
other computers or servers, if the information collected is rendered unreadable, unusable, or
indecipherable during transmission.
VI.
NO MISREPRESENTATIONS ABOUT PRIVACY
IT IS FURTHER ORDERED that respondent, directly or through any corporation,
partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants,
employees, and all persons or entities in active concert or participation with it who receive actual
notice of this Order, by personal service or otherwise, in connection with any covered rent-toown transaction shall not misrepresent, in any manner, expressly or by implication, the extent to
which respondent maintains and protects the security, privacy, or confidentiality of any data or
information from or about a consumer.
VII.
OVERSIGHT AND MONITORING OF FRANCHISEES
IT IS FURTHER ORDERED that respondent shall:
A.
Require its franchisees to delete or destroy data or information from or about a
consumer previously gathered or stored using any monitoring or geophysical location tracking
technology that does not comply with Parts I, II, and III of this Order, unless such action is
otherwise prohibited by court order or other legal obligation, in which case, after the expiration
of any such court order or other legal obligation, respondent shall require its franchisees to delete
or destroy the data or information;
B.
Within thirty (30) days after the date of service of this Order, prohibit each of its
franchisees from, in connection with a covered rent-to-own transaction:
1.
Using any monitoring technology to gather data or information from or
about a consumer from any computer rented to a consumer;
2.
Receiving, storing, or communicating any data or information from or
about a consumer that was gathered from a computer rented to a consumer using any
monitoring technology;

Page 7 of 10

3.
Gathering any data or information from any consumer product via any
geophysical location tracking technology in a manner that:
a.

does not comply with Part II of this Order; and

b.
that respondent has not approved in advance of the franchisee’s use
of such technology;
4.
Using, in connection with collecting or attempting to collect a debt,
money, or property pursuant to a covered rent-to-own transaction, any data or
information from or about a consumer obtained in a manner that does not comply with
Parts I, II, and III of this Order; and
5.
Making, or causing to be made, any false representation or depiction in
any notice, prompt screen, or other software application appearing on the screen of any
computer that results in gathering data or information from or about a consumer;
C.
Monitor compliance by each franchisee with the requirements of Parts VII.A and
VII.B, including but not limited to by annually reviewing each franchisee’s compliance with
Parts VII.A. and VII.B.; and
D.
When respondent knows, or has reason to know, whether as a result of monitoring
required by Part VII.C. or otherwise, that a franchisee has violated any requirement imposed on
that franchisee by respondent in compliance with Parts VII.A. or VII.B.:
1.

Immediately take action to ensure that the franchisee corrects its practices;

2.

Terminate any such franchisee that fails to make such correction.

and

VIII.
DISTRIBUTION OF ORDER
IT IS FURTHER ORDERED that respondent must deliver a copy of this Order to all
current and future principals, officers, directors, and managers who have responsibilities related
to the subject matter of this Order and to all franchisee principals. Delivery must occur within
thirty (30) days after the date of service of the Order for current personnel and franchisee
principals. For new personnel and franchisee principals, delivery must occur before they assume
their responsibilities. From each individual to whom respondent delivers a copy of this Order,
respondent must obtain a signed and dated acknowledgment of receipt of this Order, with any
electronic signatures complying with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et
seq.

Page 8 of 10

IX.
COMPLIANCE REPORTING
IT IS FURTHER ORDERED that:
A.
Respondent, and its successors and assigns, shall, within sixty (60) days after the
date of service of this Order, and at such other times as the Commission may require, file with
the Commission a true and accurate report, in writing, setting forth in detail the manner and form
in which they have complied with this Order. Within ten (10) days of receipt of written notice
from a representative of the Commission, respondent shall submit additional true and accurate
written reports;
B.
Respondent, and its successors and assigns, shall notify the Commission at least
thirty (30) days prior to any change in the corporation that may affect compliance obligations
arising under this Order, including, but not limited to, dissolution, assignment, sale, merger, or
other action that would result in the emergence of a successor corporation; the creation or
dissolution of a subsidiary, parent, or related entity that engages in any acts or practices subject
to this Order; the proposed filing of a bankruptcy petition; or a change in the corporate name or
address. Provided, however, that, with respect to any proposed change in the corporation about
which respondent learns less than thirty (30) days prior to the date such action is to take place,
the respondent shall notify the Commission as soon as is practicable after obtaining such
knowledge; and
C.
Unless otherwise directed by a representative of the Commission, all notices
required by this Part shall be sent by overnight courier (not the U.S. Postal Service) to the
Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580, with the subject line In re
Aaron’s, Inc., File No. 1223264. Provided, however, that, in lieu of overnight courier, notices
may be sent by first class mail, but only if an electronic version of each such notice is
contemporaneously sent to the Commission at [e-mail].
X.
RECORDKEEPING
IT IS FURTHER ORDERED that respondent shall, for five (5) years after the last date
of any act or practice covered by Parts I – VII of this Order, maintain and upon reasonable notice
make available to the Federal Trade Commission for inspection and copying, any documents,
whether prepared by or on behalf of respondent, that:
A.
Comprise or relate to complaints or inquiries, whether received directly,
indirectly, or through any third party, concerning consumer privacy, specifically including
complaints or inquiries related to any monitoring or geophysical tracking technologies and any
responses to those complaints or inquiries;
Page 9 of 10

B.
Are reasonably necessary to demonstrate full compliance with each provision of
this Order, including but not limited to, all documents obtained, created, generated, or which in
any way relate to the requirements, provisions, or terms of this Order, and all reports submitted
to the Commission pursuant to this Order;
C.

Contradict, qualify, or call into question respondent’s compliance with this Order;

D.

Acknowledge receipt of this Order obtained pursuant to Part VIII.

or

XI.
TERMINATION OF ORDER
This Order will terminate on March 10, 2034, or twenty (20) years from the most recent
date that the United States or the Federal Trade Commission files a complaint (with or without
an accompanying consent decree) in federal court alleging any violation of the Order, whichever
comes later; provided, however, that the filing of such a complaint will not affect the duration of:
A.
B.
this Part.

Any Part in this Order that terminates in less than twenty (20) years; and
This Order if such complaint is filed after the Order has terminated pursuant to

Provided, further, that, if such complaint is dismissed or a federal court rules that respondent did
not violate any provision of the Order, and the dismissal or ruling is either not appealed or
upheld on appeal, then the Order will terminate according to this Part as though the complaint
had never been filed, except that the Order will not terminate between the date such complaint is
filed and the later of the deadline for appealing such dismissal or ruling and the date such
dismissal or ruling is upheld on appeal.
By the Commission.

Donald S. Clark
Secretary
SEAL:
ISSUED: March 10, 2014

Page 10 of 10

1
2

CERTIFICATE OF SERVICE
I hereby certify that on March 21, 2014, I caused the foregoing to be electronically filed

3 with the Clerk of the Court using the CM/ECF system which will send notification of such filing
4 to the e-mail addresses denoted on the Electronic Mail Notice List, and I hereby certify that I
5 caused the foregoing document or paper to be mailed via the United States Postal Service to the
6 non-CM/ECF participants indicated on the Manual Notice List.
7

I certify under penalty of perjury under the laws of the United States of America that the

8 foregoing is true and correct. Executed on March 21, 2014.
9
10 DATED: March 21, 2014

Respectfully Submitted,

11

KIESEL LAW LLP

12
13
14
15
16

By:

/s/ Paul R. Kiesel
Paul R. Kiesel
[e-mail]
8648 Wilshire Boulevard
Beverly Hills, California 90211
Tel.: [phone]
Fax: [phone]

17
18
19
20
21
22
23
24
25
26
27
28

CERTIFICATE OF SERVICE
5:12-MD-02314-EJD