The Ultimate In Cyberspace Spying

(CBS)  Operating from his home office in Kennewick, Wash., Richard Eaton is a founding father of the revolution in computer snooping.

CBS News Correspondent Wyatt Andrews reports Eaton has invented a simple but scary spying program called WinWhatWhere Investigator that is forging new grounds in the evolving debate about Internet privacy.

Eaton demonstrates as his program captures every keystroke made on a computer – every mouse click, every e-mail sent, every word typed or deleted, everything – and then it secretly reports back to the person spying on you. It's a technology becoming increasingly popular in the workplace, at home and in criminal investigations.

Investigator is not online tracking, it's a keystroke-tracking program installed on your computer. Among other things, it's revolutionized the way employers can spy on employees. Goofing off playing solitaire? Investigator records the cards you played. Shop on the boss's computer? It knows everything. If an employee took 30 minute to shop at Amazon, the program would track it.

"Yeah, and probably what they bought," said Eaton. "And if they entered a credit card number, that will be there too."

Every morning thousands of employers like John Hammel now wake up to Investigator readouts of what their workers did yesterday. Hammel, who owns a small marina near Unionville, Ind., has warned his employees he's watching. He doesn't care about their personal business he says. However …

"If you want to go to Jim Bob, Billy Ray's porn site and buy something for your wife, you don't need to be doing that at work. Not on my time and not on my computer," says Hammel.

Who else uses Investigator? Parents spying on their children's e-mails, like Robert Coleridge, of Bellevue, Wash. Coleridge installed a keystroke program on the family computer and warned his 12-year-old daughter Amy that he would be watching her computer use.

"Eavesdropping to me is an invasion of privacy, protection is not," said Colderidge. He added that he thought the program would help protect his children from "predators."

Amy said she understands her father's point of view, but is not pleased.

"It scares me," she said. "I don't think he shouldn't, I just wish he wouldn't."

"This is powerful because it takes surveillance to the next level, said privacy advocate Evan Hendricks in Bethesda, Md. Hendricks acknowledges parents and employers have every right to monitor their own computers, but in the wrong hands, he predicts abuse.

"Like going after employees they don't like, going after a woman that refused them a date," he said. "This is a tool that can be used for things not as it was intended."

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Part 2: Feds Out-Hack Russian Hackers -- How keystroke logging technology is being used by police investigators and the FBI.