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FTC Announces Enforcement for Inadequate Third Party Risk Management Practices Under the GLBA’s Safeguards Rule

Posted on December 27, 2020 by Dissent

Hunton Andrews Kurth writes:

On December 15, 2020, the Federal Trade Commission announced a proposed settlement with Ascension Data & Analytics, LLC, a Texas-based mortgage industry data analytics company (“Ascension”), to resolve allegations that the company failed to ensure one of its vendors was adequately securing personal information of mortgage holders. The FTC alleged that Ascension’s vendor, OpticsML, stored documents with information, such as names, Social Security numbers and loan information, pertaining to tens of thousands of mortgage holders on a cloud-based server in plain text without any protections to block unauthorized access. The FTC further alleged that, as a result of the inadequate protections, the cloud-based server was subject to unauthorized access dozens of times.

Read more on Hunton Andrews Kurth.

Enforcement actions under the Gramm-Leach Bliley Act (“GLBA”) Safeguards Rule have been rare, and I am glad to see this one.  Given how many cloud storage leaks or misconfigurations researchers find on a daily basis, maybe a settlement like this one — if it gets enough media coverage — may make some companies a bit more diligent about complying with GLBA and checking their vendor’s security? Or maybe it will take half a dozen more such enforcement actions before enforcement begins to make a dent.  In any event, kudos to FTC for pursuing this issue.

 

Related posts:

  • FTC Finalizes Order with Mortgage Analytics Firm, Requiring it to Strengthen Security Safeguards, Increase Oversight of Vendors
  • FTC Takes Action Against Drizly and its CEO James Cory Rellas for Security Failures that Exposed Data of 2.5 Million Consumers
  • Equifax Reaches $1.4 Billion Data Breach Settlement in Consumer Class Action; Also Agrees to Pay $575 Million as Part of Settlement with FTC, CFPB, and States Related to 2017 Data Breach
  • Seton Family Health notifying 39,000 patients after employee falls for phish; Second Ascension Health member to report breach this week (Update2)
Category: Breach LawsBusiness SectorCommentaries and AnalysesFederalLegislationOf NoteU.S.

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