Topics In This Issue:
• Federal Issues
• State Issues
• Firm News
• Privacy/Data Security
Excerpt from Privacy/Data Security:
FTC Settles Charges Against Companies That Compromised Sensitive Employee Data. On May 3, the Federal Trade Commission (FTC) settled with two companies that maintain large amounts of sensitive, non-public information about the employees of their business customers, including Social Security numbers, for failing to employ reasonable and appropriate measures to protect the data. The settlement orders with Ceridian Corporation and Lookout Services, Inc. require the companies to implement comprehensive information security programs and obtain independent audits of the programs biennially over the next 20 years. The FTC charged that both companies claimed that they would take reasonable measures to secure customer data, but failed to do so. The flaws in their security measures were exposed when security breaches at both companies put the personal information of thousands at risk. In December, 2009, Ceridian’s web-based payroll processing application was breached, compromising the Social Security numbers and direct deposit information of approximately 28,000 employees of Ceridian’s small business customers. Likewise, Lookout’s web security allowed for unauthorized access to Social Security numbers of about 37,000 individuals by typing a relatively simple URL into a web browser without the need for a username or password for access. Both companies previously made representations regarding the comprehensive nature of their information security. The FTC settlement orders bar misrepresentations, including misleading claims about the privacy, confidentiality, or integrity of any personal information collected from or about customers.
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