Penalty Amount
$500,000
The FTC took action against CafePress for failing to secure consumer data and covering up a major data breach. The company stored sensitive information insecurely and delayed notifying customers. As part of the settlement, Residual Pumpkin must pay $500,000 in redress, and both companies must implement comprehensive security programs.
The settlement requires Residual Pumpkin to pay $500,000 to compensate affected small businesses. Both companies must implement comprehensive information security programs, including multi-factor authentication and data minimization. They must also notify affected consumers and undergo third-party security assessments.
In-house legal teams should review all agreements involving the handling of consumer or small business data, including vendor contracts (especially IT/cloud service providers), customer terms of service, and data processing addendums. Focus on clauses governing data security obligations, breach notification timelines (including requirements to notify customers and regulators), data storage/encryption standards, audit rights to verify security practices, and indemnification provisions for data breaches. Given the FTC's order requiring specific controls like multi-factor authentication and comprehensive security programs, contracts may need amendments to mandate these technical safeguards, establish regular security assessments, clarify redress mechanisms for affected parties, and potentially adjust liability caps to reflect heightened security responsibilities.
Entity
Residual Pumpkin Entity, LLC and PlanetArt, LLC
Also known as: CafePress
Industry
TechnologyOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2022/03/ftc-takes-action-against-cafepress-data-breach-cover
CafePress Complaint 0
https://www.ftc.gov/system/files/ftc_gov/pdf/CafePress-Complaint_0.pdf
Residual Pumpkin Agreement Containing Consent Order
https://www.ftc.gov/system/files/ftc_gov/pdf/Residual%20Pumpkin%20Agreement%20Containing%20Consent%20Order.pdf
PlanetArt Agreement to Containing Consent Order 0
https://www.ftc.gov/system/files/ftc_gov/pdf/PlanetArt%20Agreement%20to%20Containing%20Consent%20Order_0.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Residual Pumpkin Entity, LLC, the former owner of CafePress, and PlanetArt, LLC, which bought CafePress in 2020"
"Residual Pumpkin to pay $500,000 in redress to victims of the data breaches"
"CafePress employed careless security practices and concealed multiple breaches from consumers."
$500K
The FTC settled with CafePress's former owner Residual Pumpkin Entity, LLC and buyer PlanetArt, LLC over data security failures that led to a breach exposing Social Security numbers and other sensitive data. Residual Pumpkin paid $500,000 for victim compensation, and both companies must implement comprehensive security programs. A claims process is open for affected consumers until March 10, 2024.
$930K
The FTC finalized orders requiring CMG Media Corporation (doing business as Cox Media Group), MindSift LLC, and 1010 Digital Works LLC to pay a total of $930,000 for falsely claiming they offered an AI-powered service that could target ads based on conversations captured from consumers' smart devices, and that consumers had opted into such targeting. The orders also prohibit the companies from making misrepresentations about their advertising services, voice data collection, and consumer consent.
The FTC announced it is seeking public comment on a proposed enforcement policy statement regarding personalized pricing, which is the use of personal data to set prices based on what a company believes an individual consumer is willing to spend. The statement warns that undisclosed collection or use of personal data for personalized pricing could violate the FTC Act's prohibition on unfair or deceptive practices. The Commission voted 2-0 to authorize the Federal Register notice.
$4.0M
The FTC and Connecticut secured a $4 million settlement with Chase Nissan LLC (doing business as Manchester City Nissan) over allegations the dealership charged consumers unauthorized fees, including double-charging for 'certified pre-owned' vehicles and inserting charges like total loss protection into financing agreements without consent. The settlement requires $4 million in consumer redress, prohibits misrepresentations about vehicle certification and warranties, mandates prominent disclosure of the maximum total vehicle price, and requires express informed consent for all charges.
The FTC filed a complaint against Credit Glory LLC and related entities for deceptive credit repair practices, including false promises, impersonating debt collectors, charging illegal upfront fees, and using negative option billing without consent. A federal court temporarily halted the operation.
The FTC issued a policy statement abandoning disparate-impact liability, stating it will no longer bring claims based on this theory. It also modified compliance obligations for several companies based on past decisions.