FTC Given Authority to Sue for Poor Data Security

Consumers may now be able to sigh a tiny sigh of relief. The Federal Trade Commission (FTC) has been given authority by a Philadelphia-based U.S. appeals court to sue companies that fail to adequately secure customer information.

This particular case came to light after the hotel operator, Wyndham Worldwide was deemed unable to keep its customers’ data safe against three data breaches between 2008 and 2010. The result was stolen information for over 619,000 customers and over $10.6 million in unauthorized activity on payment cards.

Wyndham challenged the FTC’s ability to sue claiming that it was also a victim and that the agency didn’t have the right to sue when it would not issue any kind of guidelines or standards for security customer data. The FTC retorted that providing those standards was akin to providing hotels regulation for choosing the locks on hotel room doors.

Fifty three companies have been accused by the FTC of failing to maintain reasonable data security measures, including social media photo site Snapchat, Twitter, and Credit Karma.

If you were the victim of any data breach, the advice is still the same.  Monitor all payment card charges closely and report anything that doesn’t seem right to your financial institution. The sooner you identify fraud, the easier it is to remedy the situation.

If you have ever had your social security number accessed illegally, be sure to monitor your credit reports for fraudulent charges as well. Everyone who has credit in the U.S. has a credit report and one from each of the three major credit bureaus (Experian, Equifax, and TransUnion) is available for free each year. Just visit the annual credit report site to order them. Consider staggering when you order them so that you receive one every four months. This allows you to address issues faster.

If anything on your credit report is not correct, including past addresses or credit cards, make sure to contact the credit bureau to have it removed. It may not seem like a big deal, but it could be if your identity is stolen.

In addition to try to push companies to have better information security measures in place, FTC Chair, Edith Ramirez has stated she will urge Congress to pass some legislation surrounding data security. Until then, consumers may take a breath knowing that the FTC is watching their backs.