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Consent DecreeLow Risk

FTC Orders Blackbaud to Boost Data Security After Breach

Blackbaud Inc.May 20, 2024Federal Trade Commission

Summary

The FTC finalized a consent order against Blackbaud Inc. for alleged security failures that led to a data breach exposing personal data of millions of consumers. Blackbaud must delete unnecessary data, implement a security program, and not misrepresent its policies. No monetary penalty was imposed.

Remedy

Blackbaud is required to delete data it no longer needs, develop a comprehensive information security program, establish a data retention schedule, refrain from misrepresenting data security and retention policies, and notify the FTC of future data breaches.

Data DeletionInjunctionCompliance ProgramReporting Requirements

Contract Impact

In-house legal teams should review all vendor agreements where Blackbaud is a data processor or service provider (e.g., SaaS, fundraising, financial software contracts) and any customer-facing data processing agreements. Key clauses to scrutinize include data security obligations, breach notification timelines and procedures, data retention and deletion requirements, representations regarding security practices, and indemnification provisions. Given the order's focus on data minimization and deletion of unnecessary data, contracts may need amendments to explicitly require data minimization, mandate encryption of sensitive data (like SSNs and bank accounts), establish clear incident response protocols, and prohibit misrepresentations about security. Teams should also assess audit rights to verify compliance and ensure notification clauses align with the 'without unreasonable delay' standard implied by the FTC's criticism of Blackbaud's two-month delay.

Contract Search Terms

data retention schedulebreach notification clausedata processing addendumsecurity incident response plandata minimization policyencryption requirementsthird-party audit rightscustomer notification proceduresdata security representationssafeguards for sensitive data

Violation Types

Entity Details

Entity

Blackbaud Inc.

Also known as: Blackbaud

Industry

Technology

Official Sources

Source Evidence

Entity Name
"Blackbaud Inc."
Violation Types
"failed to implement appropriate safeguards to secure and protect the vast amounts of personal data it collects"
Violation Types
"allowed a hacker to breach the company’s network and access the personal data of millions of consumers including Social Security and bank account numbers."
Violation Types
"The company waited nearly two months to notify its customers about the breach and then misled consumers about the extent of the data that was stolen."

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