Keyloggers are usually used as part of a spyware payload when it comes to discussing how they are used by hackers and cyber-criminals. They can also be devices that are installed on computers by people involved in espionage or super sleuth information gathering techniques. Keyloggers can be a hardware device or a software program. If they are being delivered as part of the spyware payload, then they are of the software variety. These programs are designed for one specific purpose and that is to log, or register, each and every keystroke a computer user makes while they are sitting at a computer using it with any program or on any website. Oftentimes keyloggers remain hidden in the background and aren't easily detected unless other problems begin to crop up on the computer that is infected.
Keyloggers that come in the form of a hardware device are generally associated with computers that are being used in a work environment. These keyloggers are put in place by the IT Specialist the company hires and they are generally used to ensure office computers are being used for company business only. They can come in very handy too should any sensitive information come up missing, or appear to get 'leaked' as the employer can then instruct the IT Specialist to sift through the keyloggers storage system and see if any specific work station can be identified. Proponents of these types of keyloggers argue that employers pay for the equipment, the Internet access to use it, as well as the electricity to power it, so they have every right to monitor it however they deem appropriate. Opponents argue that it infringes on an individual's rights to privacy and violates their freedom of speech.
Keyloggers can be used for any number of reasons. They can provide the one that installed them with all kinds of personal information. Including your name, address, mailing address if different from physical, your phone number, credit card information, financial institution information, online shopping habits, or just about anything you can think of. All of the information you thought was protected can be easily deciphered by somebody that knows how to use one of these devices successfully. Employers that use keyloggers should inform their employees of this procedure prior to allowing them computer access, this way they know up front what information they do not want to use while they are at the office.
If you know your computer has one of these keyloggers on it, you should definitely use extreme caution when typing any information into any program or document. Do not assume that just because you are using a personal email account you are safe. Keyloggers will record that information as well.
Most people won't realize that they have keyloggers delivered by spyware programs until something else on their computer starts acting up. The computer starts lagging, or running slower and slower until it starts freezing up or quits altogether. Certain plug-in equipment like headphones, external speakers, webcams, microphones and even your mouse will stop working, or work sporadically.
Some of the more intrusive keyloggers are capable of capturing screenshots without your approval or knowledge which can then be used to determine the sensitive information you have available at any given time.
Other keyloggers can actually take over control of certain computer features or programs and turn them on secretly, like your webcam and any audio equipment, transmitting what they see to a remote computer, which can be viewed in conjunction with other keyloggers, to help establish what types of patterns you follow, or to determine what hard to decipher encrypted passwords might be.