With its button nose and tartan bow, it looks at first glance like a typical teddy bear. But this huggable toy does more than dress up a bed. It comes equipped with a hidden camera to watch the baby-sitter while the baby-sitter watches the kids.
A few examples of horrific treatment caught on camera and widely publicized have created a boom in the nanny-surveillance industry. Babywatch Corp., a company based in Spring Valley, New York, has sold $5,000 hidden-camera setups to entrepreneurs in 20 cities, who rent them out for about $200 a pop. Other anxious parents are buying their own...