Rented computers from seven different companies secretly took photographs of their users, US authorities have said.
The companies used software made by US company Designerware which could track key strokes and other personal data.
The software, called PC Rental Agent, captured people engaging in "intimate acts", including sex.
The settlement means the companies are banned from using the software which invaded the users' privacy.
However, some software - such as location tracking - could still be used as long as the companies involved made it explicitly clear to the users.
It is believed that PC Rental Agent has been installed in approximately 420,000 computers worldwide.
The Federal Trade Commission ruling concerned a feature in the software, called Detective Mode, which would typically become activated if the user was late in returning equipment, or failed to pay for use.
Detective Mode would assist the rental store in locating the overdue computer in order to pursue its return.
Part of the process involved a pop-up window designed to look like a software registration screen.
It would request personal information such as email addresses and telephone numbers that could then be used to pursue the users for payment and/or the return of equipment.
Why you should never rent a computer
Why you should never rent a computer
“If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and weren't so lazy.”
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Re: Why you should never rent a computer
I remember waaaaay back when the VAX at our company went down and the guy in charge couldn't figure out why. He called the company we bought it from and they determined that our company hadn't paid the installment payment and there was software in the computer that shut it down if it didn't get "clearance".