InfoBytes Blog
New York AG Schneiderman Announces $100,000 Settlement Over Data Security Practices
On August 5, New York AG Schneiderman announced that an online retailer will pay $100,000 in penalties to settle allegations that its weak security practices led to a data breach that potentially exposed more than 25,000 credit card numbers and cardholder data. According to AG Schneiderman, after a third party accessed the retailer’s website on August 7, 2014, a merchant bank notified the retailer on June 5, 2015 that customers’ credit card accounts were showing fraudulent charges. The retailer subsequently hired a company to conduct a forensic investigation, during which malware was found on and subsequently removed from the retailer’s website. AG Schneiderman contends that the retailer violated various sections of the New York State General Business Law by failing to notify its customers or law enforcement of the breach and by misrepresenting the safety and security of its website, also in breach of Executive Law § 63(12). In addition to the $100,000 penalty, the settlement requires that the retailer (i) conduct thorough and efficient investigations of future data security breaches; (ii) promptly notify New York law enforcement and affected customers of data security breaches; (iii) “maintain reasonable security policies and procedures designed to protect the personal information of consumers in accordance with New York State General Business laws”; (iv) remediate security vulnerabilities on its websites; and (v) train its employees with the most current data security practices.