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.

  • By Haley Samsel
  • Nov 14, 2019

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

  • Video Surveillance Trends to Watch

    With more organizations adding newer capabilities to their surveillance systems, it’s always important to remember the “basics” of system configuration and deployment, as well as the topline benefits of continually emerging technologies like AI and the cloud. Read Now

  • New Report Reveals Top Trends Transforming Access Controller Technology

    Mercury Security, a provider in access control hardware and open platform solutions, has published its Trends in Access Controllers Report, based on a survey of over 450 security professionals across North America and Europe. The findings highlight the controller’s vital role in a physical access control system (PACS), where the device not only enforces access policies but also connects with readers to verify user credentials—ranging from ID badges to biometrics and mobile identities. With 72% of respondents identifying the controller as a critical or important factor in PACS design, the report underscores how the choice of controller platform has become a strategic decision for today’s security leaders. Read Now

  • Overwhelming Majority of CISOs Anticipate Surge in Cyber Attacks Over the Next Three Years

    An overwhelming 98% of chief information security officers (CISOs) expect a surge in cyber attacks over the next three years as organizations face an increasingly complex and artificial intelligence (AI)-driven digital threat landscape. This is according to new research conducted among 300 CISOs, chief information officers (CIOs), and senior IT professionals by CSC1, the leading provider of enterprise-class domain and domain name system (DNS) security. Read Now

  • ASIS International Introduces New ANSI-Approved Investigations Standard

    • Guard Services

  • Cloud Security Alliance Brings AI-Assisted Auditing to Cloud Computing

    The Cloud Security Alliance (CSA), the world’s leading organization dedicated to defining standards, certifications, and best practices to help ensure a secure cloud computing environment, today introduced an innovative addition to its suite of Security, Trust, Assurance and Risk (STAR) Registry assessments with the launch of Valid-AI-ted, an AI-powered, automated validation system. The new tool provides an automated quality check of assurance information of STAR Level 1 self-assessments using state-of-the-art LLM technology. Read Now

Most   Popular

New Products

  • PE80 Series

    PE80 Series by SARGENT / ED4000/PED5000 Series by Corbin Russwin

    ASSA ABLOY, a global leader in access solutions, has announced the launch of two next generation exit devices from long-standing leaders in the premium exit device market: the PE80 Series by SARGENT and the PED4000/PED5000 Series by Corbin Russwin. These new exit devices boast industry-first features that are specifically designed to provide enhanced safety, security and convenience, setting new standards for exit solutions. The SARGENT PE80 and Corbin Russwin PED4000/PED5000 Series exit devices are engineered to meet the ever-evolving needs of modern buildings. Featuring the high strength, security and durability that ASSA ABLOY is known for, the new exit devices deliver several innovative, industry-first features in addition to elegant design finishes for every opening.

  • 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.

  • ResponderLink

    ResponderLink

    Shooter Detection Systems (SDS), an Alarm.com company and a global leader in gunshot detection solutions, has introduced ResponderLink, a groundbreaking new 911 notification service for gunshot events. ResponderLink completes the circle from detection to 911 notification to first responder awareness, giving law enforcement enhanced situational intelligence they urgently need to save lives. Integrating SDS’s proven gunshot detection system with Noonlight’s SendPolice platform, ResponderLink is the first solution to automatically deliver real-time gunshot detection data to 911 call centers and first responders. When shots are detected, the 911 dispatching center, also known as the Public Safety Answering Point or PSAP, is contacted based on the gunfire location, enabling faster initiation of life-saving emergency protocols.