The operator of CafePress, an online retailer that sells customizable mugs and other products, has reached an agreement with New York State Attorney General Letitia James and six other State Attorneys Generals to settle claims related to a 2019 data breach.  The breach stemmed from a cyberattack that the company suffered in early 2019. Upon learning of the attack, the company engaged a third-party investigation firm that identified a vulnerability in the company’s Structured Language Query (SQL) protocols. As a result, CafePress looked at its database and two weeks of logs but did not find evidence of any data breach.  Regardless, CafePress released a security patch to fix the vulnerability and automatically reset the passwords of all customer accounts, requiring all users to reset their passwords upon logging in.
Continue Reading New York and Others Settle with CafePress Over 2019 Data Breach

The FTC recently settled with Ascension Data & Analytics for failure to oversee service providers. Ascension provides services to mortgage companies within its corporate family of entities. According to the complaint, Ascension uses third parties to provide some of its services. One of those, OpticsML, had access to tax returns for approximately 60,000 customers. OpticsML stored the information on a cloud-based server which server was publicly accessible for a year. During that time the tax documents were accessed by unauthorized individuals. The originating IP addresses were in Russia and China.  Although the security incident was that of OpticsML, the FTC alleged that Ascension violated the Gramm-Leach-Bliley Act’s Safeguards Rule. Namely, the company failed to properly oversee its service providers and it failed to adequately assess risk. In particular, the FTC alleged that:
Continue Reading FTC Settles Over Alleged Failure to Manage Service Providers

For the first time, the U.S. Supreme Court has agreed to review the Computer Fraud and Abuse Act (CFAA) in Van Buren v. United States, No. 19-783. A federal circuit split exists on the issue of whether the statute can only be used against hackers and unauthorized users of electronic systems, or also against authorized users who use the information for unauthorized purposes. In the context of data breaches, companies sometimes look to interpretations of the meaning of “authorization” in CFAA cases to analyze whether notification obligations may exist.
Continue Reading SCOTUS Review of CFAA May Impact Analysis in Data Breach Notification Obligations

At the end of March, Washington, D.C. signed the Security Breach Protection Amendment Act of 2019, which adds some significant changes to D.C.’s existing data breach law, first enacted in 2007. The law is projected to take effect by June 13, 2020. Some of the major changes are summarized below.
Continue Reading D.C. Amends Data Breach Notification Law, Adds Security Requirements

During their COVID-19 preparations, companies are dusting off -and deploying- their business continuity plans. Also worth revisiting are incident response plans. Teams working remotely, if faced with a data breach, will still face privilege issues. For this reason simply moving to asynchronous forms of communication (email, chat, etc.) may not suffice, or may increase legal risk and exposure. Teams will thus need to be prepared for coming together virtually. Turning on the camera to converse remotely with video can be an impactful and important way to effectively handle a breach situation. To prepare, here are three key questions companies can consider:
Continue Reading Turn on the Camera Part Two: Are You Prepared to Handle a Breach Remotely and Do You Know Your Legal Security Obligations?

Businesses collecting personal information from New York residents will soon be expected to apply enhanced data security requirements. The New York SHIELD Act, signed into law in July 2019, expanded breach notice requirements in October 2019. Now, On March 21, 2020, the remaining provisions related to data security will also come into effect. As we wrote previously, businesses subject to the law must implement data security programs that include at least the following:
Continue Reading NY SHIELD Act Data Security Requirements Effective This Month

In response to the killing of Major General Qassim Suleimani, the government of Iran and its supreme leader, Ayatollah Ali Khamenei, have declared the country’s intention to strike back at the United States. According to reports, their desire is to respond proportionally, but not start a war, and they are contemplating multiple options, any subset of which they may implement.
Continue Reading Iran’s Imminent Cybersecurity Threat

The FTC recently settled with Infotrax Systems, L.C. a technology company providing software to the direct sales industry. The settlement followed a breach suffered by the company, and involved allegations the company had failed to use reasonable security. According to the FTC, for almost two years, a hacker accessed InfroTrax’s server unnoticed at least seventeen times. The data accessed included social security numbers and payment card information. It also included unencrypted user IDs and passwords. Infotrax learned of the incident from an alert that one of its servers had reached maximum storage capacity.
Continue Reading FTC and Software Company Reach Security Settlement Over Unfair Practices