On May 24, 2018, the Federal Trade Commission granted final approval to a settlement (the “Final Settlement”) with PayPal, Inc., to resolve charges that PayPal’s peer-to-peer payment service, Venmo, misled consumers regarding certain restrictions on the use of its service, as well as the privacy of transactions. The proposed settlement was announced on February 27, 2018. In its complaint, the FTC alleged that Venmo misrepresented its information security practices by stating that it “uses bank-grade security systems and data encryption to protect your financial information.” Instead, the FTC alleged that Venmo violated the Gramm-Leach-Bliley Act’s (“GLBA’s”) Safeguards Rule by failing to (1) have a written information security program; (2) assess the risks to the security, confidentiality and integrity of customer information; and (3) implement basic safeguards such as providing security notifications to users that their passwords were changed. The complaint also alleged that Venmo (1) misled consumers about their ability to transfer funds to external bank accounts, and (2) misrepresented the extent to which consumers could control the privacy of their transactions, in violation of the GLBA Privacy Rule. Continue Reading FTC Approves Settlement with PayPal Regarding Alleged Venmo Privacy Misrepresentations
On February 27, 2018, the Federal Trade Commission (“FTC”) announced an agreement with PayPal, Inc., to settle charges that its Venmo peer-to-peer payment service misled consumers regarding privacy and the extent to which consumers’ financial accounts were secured. This is the second significant FTC settlement in the past three months that addressed these issues, following the FTC’s action against TaxSlayer, Inc. and signals a renewed focus by the FTC on violations of the Gramm-Leach-Bliley Act’s (“GLBA’s”) Privacy and Safeguards Rules. Continue Reading FTC Announces Settlement for Venmo’s Alleged Violations of the GLBA’s Privacy and Safeguards Rules
On November 8, 2017, the FTC announced a settlement with Georgia-based online tax preparation service, TaxSlayer, LLC (“TaxSlayer”), regarding allegations that the company violated federal rules on financial privacy and data security. According to the FTC’s complaint, malicious hackers were able to gain full access to nearly 9,000 TaxSlayer user accounts between October 2015 and December 2015. The hackers allegedly used the personal information contained in the users’ accounts, including contact information, Social Security numbers and financial information, to engage in tax identify theft and obtain tax refunds through filing fraudulent tax returns. The FTC charged TaxSlayer with violating the Gramm-Leach-Bliley Act’s Safeguards Rule and Privacy Rule. Continue Reading FTC Announces Settlement with Tax Prep Service Over Financial Privacy and Security Violations
On April 6, 2017, New Mexico became the 48th state to enact a data breach notification law, leaving Alabama and South Dakota as the two remaining states without such requirements. The Data Breach Notification Act (H.B. 15) goes into effect on June 16, 2017. Continue Reading New Mexico Enacts Data Breach Notification Law
On October 25, 2016, the Federal Trade Commission released a guide for businesses on how to handle and respond to data breaches (the “Guide”). The 16-page Guide details steps businesses should take once they become aware of a potential breach. The Guide also underscores the need for cyber-specific insurance to help offset potentially significant response costs. Continue Reading FTC Issues Guide for Businesses on Handling Data Breaches
On September 15, 2016, the New Jersey Senate unanimously approved a bill that seeks to limit retailers’ ability to collect and use personal data contained on consumers’ driver and non-driver identification cards. The bill, known as the Personal Information and Privacy Protection Act, must now be approved by the New Jersey Assembly. Continue Reading New Jersey Moves Forward With Shopper Privacy Bill
On August 29, 2016, the Federal Trade Commission announced that it is seeking public comment on the Gramm-Leach-Bliley Act (“GLB”) Safeguards Rule. The GLB Safeguards Rule, which became effective in 2003, requires financial institutions to develop, implement and maintain a comprehensive information security program to safeguard customer information. Continue Reading FTC Seeks Input on GLB Safeguards Rule
Lisa J. Sotto, partner and head of Hunton & Williams LLP’s Global Privacy and Cybersecurity practice group, recently spoke at Bloomberg Law’s Second Annual Big Law Business Summit. In Part 1 of the panel discussion, Lisa describes the dramatic changes in the legal landscape of privacy over the last 10 to 15 years, discussing the emergence of privacy laws such as “the Gramm-Leach-Bliley Act for the financial sector, HIPAA for the health care sector and…of course, the local implementation of the European Data Protection Directive.” She then continues to note an “explosion” in the legal landscape in 2005 due to the first data breach that drew national attention, after which, “cyber and privacy grew in parallel.”
Personal information about consumers is the lifeblood of many organizations. Because of the potential value of the information, companies are increasingly focused on privacy and data security issues that arise in the context of mergers, acquisitions, divestitures and related transactions. In many corporate transactions, data is a critical asset that should be addressed as a key deal point. Unfortunately, too often personal data is transferred without consideration of the issues that otherwise might change the pricing of a deal – or kill it altogether. In a recent article published by Corporate Counsel, Hunton & Williams partner Lisa J. Sotto and associate Ryan P. Logan discuss the privacy and data security-related legal issues that arise in corporate transactions, and provide a how-to guide on addressing those issues during the various stages of a transaction.
Download a copy of the article.
On December 9, 2015, the Federal Trade Commission announced that Wyndham Worldwide Corporation (“Wyndham”) settled charges brought by the FTC stemming from allegations that the company unfairly failed to maintain reasonable data security practices. The case is FTC v. Wyndham Worldwide Corporation, et al. (2:13-CV-01887-ES-JAD) in the U.S. District Court for the District of New Jersey.