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The FTC recently entered into a Consent Order last week with Wyndham Hotels and Resorts resolving the FTC’s allegations that Wyndham did not do enough to prevent its customer’s credit card data from three data breaches that occurred in 2008 and 2009. The Consent Order comes on the heels of the Third Circuit’s opinion in the case in which the court held that the FTC has an authority to hold companies accountable for failing to safeguard consumer data. See Federal Trade Commission v. Wyndham Worldwide Corp., 799 F. 3d 236 (3rd Cir. 2015).
Specifically, the Complaint alleges that:
Specifically, the FTC’s complaint alleges that on three separate occasions in 2008 and 2009 hackers gained access to Wyndham’s network and property management systems and obtained unencrypted information on over 619,000 consumers. The complaint alleges that Wyndham participated in deceptive and unfair acts or practices related to their data security by failing to address the weaknesses of its cyber security systems that had led to prior attacks.
The Consent Order, which will remain in effect for twenty years, requires Wyndham, among other things:
Businesses which store private personal information should take note of the FTC Consent Order and take the following lessons to heart:
Caren Enloe is a partner who concentrates her practice in consumer financial services litigation and compliance, bankruptcy, and commercial litigation with an emphasis on creditor’s rights. She has a deep understanding of the complex compliance environment surrounding the financial services industry and regularly advises financial service companies on licensing and compliance issues involving state and federal consumer protection and finance statutes. Caren is the author of a daily blog titled: Consumer Financial Services Litigation and Compliance where she posts timely and informative updates regarding the CFPB, FTC, and a host of topical litigation issues involving consumer protection law....LEARN MORE