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FTC Settles with CafePress Over Data Security Failures, $370K in Refunds

CafePressMarch 1, 2022Federal Trade Commission

Penalty Amount

$370,000

Consumers Affected

20,044

Summary

The FTC settled with CafePress for failing to implement reasonable data security measures, leading to multiple breaches that exposed Social Security numbers and other sensitive data. As part of the settlement, over $370,000 in refunds are being distributed to 20,044 consumers who filed valid claims.

Remedy

The FTC is sending payments totaling more than $370,000 to 20,044 consumers who filed a valid claim before the deadline, via checks and PayPal.

Consumer Refunds

Contract Impact

In-house legal teams should review vendor agreements, customer contracts, and any data processing agreements (DPAs) that involve the handling of sensitive personal data (e.g., Social Security numbers). Focus on clauses addressing data security obligations, data retention limits, and breach notification requirements. Specific changes may include: mandating encryption for sensitive data at rest and in transit; implementing clear data minimization and retention schedules; requiring prompt breach notification to affected individuals and regulators (e.g., within 72 hours); and adding provisions for regular security audits and vulnerability assessments. Contracts should also prohibit storing sensitive data in clear, readable text and require reasonable access controls.

Contract Search Terms

reasonable security measuresdata encryption standardsdata retention schedulebreach notification clauseaccess controlssecurity incident response planprohibition on clear text storageconsumer notification requirements

Violation Types

Entity Details

Entity

CafePress

Industry

Technology

Official Sources

Source Evidence

Entity Name
"CafePress"
Violation Types
"CafePress failed to implement reasonable security measures to protect the sensitive information stored on its network. In addition to storing Social Security numbers and password reset answers in clear, readable text, CafePress retained the data longer than was necessary. As a result of its shoddy security practices, CafePress’ network was breached multiple times allowing hackers to access sensitive user data including Social Security numbers. The company also failed to adequately inform consumers about these breaches."
Consumers Affected
"20,044 consumers"

Related Enforcement Actions

FTC

CafePress

$500K

The FTC finalized an order against CafePress for failing to secure consumer data and covering up a data breach. The company must implement comprehensive security measures, and its former owner must pay $500,000 in redress to victims.

NJ

CafePress

$2.0M

New Jersey joined a multistate $2 million settlement with online retailer CafePress over a 2019 data breach that exposed personal information of approximately 22 million consumers nationwide, including over 540,000 in New Jersey. The settlement requires CafePress to implement a comprehensive cybersecurity program, incident response plan, and third-party assessments for five years, with payment suspended pending compliance.

FTC

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FTC

Federal Trade Commission

The FTC issued its annual report to Congress describing fraud trends affecting older adults and the agency’s enforcement, education, and outreach efforts. The report is not a specific privacy enforcement action and announces no penalty or remedy.

FTC

REPS & Company Inc.

The FTC referred a complaint against REPS & Company Inc. and company executives, alleging they bypassed ticket-issuer security controls and purchasing limits to acquire millions of tickets for resale. The complaint was filed by the Department of Justice, and the case will be decided by the court; the press release does not report a penalty or other remedy imposed.

FTC

Accelerated Debt Settlement Inc.; ADS Resolve LLC; Financial Solutions Group LLC; Unified Capital Services LLC; Mediwerks; Resolution Specialists LLC; and Futura Capital

$106.8M

A federal court entered a $106.8 million default judgment against corporate defendants in an alleged debt-relief scheme that impersonated banks and government entities and targeted seniors and veterans. The judgment permanently bans the defendants from the debt-relief industry and imposes additional prohibitions, including on impersonation, telemarketing, and misrepresentations.