"Users are not aware that every keystroke made while entering sensitive information - such as passphrases (or) passwords on local or remote systems - are captured by (the software)" -Modzero
When Modzero contacted HP about the issue the company went radio silent, so the Swiss firm went public with it's findings. When UK based Sky News picked up the story and reached out to HP, the company said they were "aware of the keylogger issue on select HP PCs."
HP told Sky News: "Our supplier partner developed software to test audio functionality prior to product launch and it should not have been included in the final shipped version. Fixes will be available shortly via HP.com." -Sky News
A full list of affected laptops can be found here.
Here is Modzero's writeup on how the keylogger works:
Conexant's MicTray64.exe is installed with the Conexant audio driver
package and registered as a Microsoft Scheduled Task to run after each
user login. The program monitors all keystrokes made by the user to
capture and react to functions such as microphone mute/unmute
keys/hotkeys. Monitoring of keystrokes is added by implementing a low-
level keyboard input hook  function...
In addition to the handling of hotkey/function key strokes, all key-
scancode information  is written into a logfile in a world-readable