Federal Trade Commission

FTC Reaches Settlement With Utah Company Accused of Improperly Protecting Customer Data

Between 2014 and 2016, a hacker was able to access the personal information of about 1 million InfoTrax Systems customers. Now, the FTC is taking action.

In its latest bid to punish companies for failing to protect customer data, the Federal Trade Commission has reached a proposed settlement with InfoTrax Systems, a provider of operations systems for multi-level marketers.

InfoTrax, which is based in Utah, faced a series of intrusions between 2014 and 2016 that exposed the data of about 1 million customers, including information like addresses, Social Security numbers, passwords and more. Some 500 payment card numbers and 16 bank account numbers were also compromised, according to the FTC.

The commission found that the company failed to implement “reasonable security safeguards,” essentially allowing a hacker to access the sensitive data more than 20 times before InfoTrax realized it had been hacked in March 2016.

“Service providers like InfoTrax don’t get a pass on protecting sensitive data they handle just because their clients are other businesses rather than individual consumers,” Andrew Smith, the director of the FTC’s Bureau of Consumer Protection, said in a statement on Tuesday. “As this case shows, it’s every company’s responsibility to protect customers’ personal information, especially sensitive data like Social Security numbers.”

Under the proposed terms of the settlement, InfoTrax will be required to create a cybersecurity program to address the security failures in the FTC complaint. Those issues included failing to delete personal information the company no longer needed, adequately segment its network and implement safeguards to detect unusual activity in the network.

Customer data was also left unencrypted within the company’s systems, making it easy for hackers to access and use the information for malicious purposes.

In addition to creating and enforcing a cybersecurity plan, InfoTrax will face third-party assessments of its program every two years. The third-party assessor, which the FTC must approve, will conduct employee interviews, conduct independent sampling and review documents before drawing conclusions about the effectiveness of the security measures.

Just last month, the FTC handed down another proposed settlement that banned a mobile app company, Retina-X Studios, LLC, from selling “stalkerware” monitoring apps unless they implemented measures to ensure the apps were used for “legitimate purposes.”

That settlement also required the company and its owner to implement a cybersecurity plan similar to the one described in the InfoTrax case. After a public comment period of 30 days, the FTC will finalize the settlement and InfoTrax must follow its terms for 20 years -- a time period questioned by Commissioner Christine S. Wilson in a statement released on Tuesday.

“I believe that, in many industries, it is not realistic for the Commission to draft injunctive relief expecting that it will remain relevant and continue benefitting consumers for 20 years,” Wilson wrote, urging the commission to limit settlement periods to 10 years.

About the Author

Haley Samsel is an Associate Content Editor for the Infrastructure Solutions Group at 1105 Media.

Featured

  • Just as Expected

    GSX produced a wonderful tradeshow earlier this week. Monday was surprisingly strong in the morning, and the afternoon wasn’t bad at all. That’s Monday’s results and asking attendees to travel on Sunday. Just a quick hint, no one wants to give up their weekend to travel and set up an exhibit booth. I’m just saying. Read Now

    • Industry Events
    • GSX
  • NOLA: The Crescent City

    Twenty years later we finds ourselves in New Orleans. Twenty years ago the aftermath of Hurricane Katrina forced exhibitors and attendees to look elsewhere for tradeshow floor space. Read Now

    • Industry Events
    • GSX
  • Nothing Artificial About this Intelligence

    I have been looking forward to this year’s GSX show in New Orleans, the Cresent City, or if you prefer The Big Easy. It seems like quite a while since we’ve been here. Twenty years ago, ASIS, as it was known then was literally washed out of the city by someone known as Katrina. It is a good thing to come back to NOLA. Read Now

  • From Monitors to Mission Control

    Security Operations Centers (SOC) were once defined by rows of static monitors, each displaying a single feed with operators quietly watching for issues. That model has become obsolete. Incidents evolve too quickly, data comes from multiple locations, and decisions must be made in seconds—not minutes. Read Now

  • New Gas Monkey Garage Venue Uses AI-Enhanced Video Technology

    Gas Monkey Garage, the automotive custom shop and entertainment brand founded by Richard Rawlings of Fast N’ Loud TV fame, has opened a vibrant new restaurant and bar in South Dakota, equipped with advanced, AI-enhanced video tech from IDIS Americas. Read Now

New Products

  • Mobile Safe Shield

    Mobile Safe Shield

    SafeWood Designs, Inc., a manufacturer of patented bullet resistant products, is excited to announce the launch of the Mobile Safe Shield. The Mobile Safe Shield is a moveable bullet resistant shield that provides protection in the event of an assailant and supplies cover in the event of an active shooter. With a heavy-duty steel frame, quality castor wheels, and bullet resistant core, the Mobile Safe Shield is a perfect addition to any guard station, security desks, courthouses, police stations, schools, office spaces and more. The Mobile Safe Shield is incredibly customizable. Bullet resistant materials are available in UL 752 Levels 1 through 8 and include glass, white board, tack board, veneer, and plastic laminate. Flexibility in bullet resistant materials allows for the Mobile Safe Shield to blend more with current interior décor for a seamless design aesthetic. Optional custom paint colors are also available for the steel frame.

  • 4K Video Decoder

    3xLOGIC’s VH-DECODER-4K is perfect for use in organizations of all sizes in diverse vertical sectors such as retail, leisure and hospitality, education and commercial premises.

  • EasyGate SPT and SPD

    EasyGate SPT SPD

    Security solutions do not have to be ordinary, let alone unattractive. Having renewed their best-selling speed gates, Cominfo has once again demonstrated their Art of Security philosophy in practice — and confirmed their position as an industry-leading manufacturers of premium speed gates and turnstiles.