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Consent DecreeHigh Risk

FTC Fines Verkada $2.95M for Data Security and CAN-SPAM Violations

VerkadaAugust 30, 2024Federal Trade Commission

Penalty Amount

$2,950,000

Consumers Affected

150,000

Summary

Verkada, a security camera company, failed to secure customer data, leading to a hacker accessing over 150,000 cameras and sensitive health information. The company also violated the CAN-SPAM Act by sending spam emails without proper opt-out mechanisms. To settle, Verkada will pay $2.95 million and implement a comprehensive security program with audits.

Remedy

Verkada must pay $2.95 million, implement a comprehensive information security program with third-party audits, and is prohibited from making misrepresentations about its privacy practices and from violating the CAN-SPAM Act.

Monetary PenaltyCompliance ProgramAudit RequirementInjunction

Contract Impact

In-house legal teams should review all vendor agreements with healthcare providers (hospitals, clinics) and customer contracts for security camera services, as Verkada's failures involved inadequate protection of health data viewed via cameras. Key clauses to scrutinize include data security standards, HIPAA compliance obligations, breach notification timelines and procedures, and limitations of liability for data incidents. For marketing-related agreements, review email marketing terms, consent requirements, and opt-out mechanisms to ensure CAN-SPAM Act compliance. Contracts may need amendments to mandate specific technical safeguards (e.g., encryption, access controls), require regular security audits, incorporate HIPAA business associate terms, and strengthen email compliance provisions with clear unsubscribe functionality and record-keeping.

Contract Search Terms

data security requirementsencryption standardsHIPAA business associate agreementbreach notification clauseemail marketing complianceopt-out mechanismdata processing addendumaudit rightsconsent mechanismssecurity program obligations

Laws Cited

CAN-SPAM ActHealth Insurance Portability and Accountability Act of 1996 (HIPAA)EU-U.S. Privacy Shield frameworkSwiss-U.S. Privacy Shield framework

Violation Types

Entity Details

Entity

Verkada

Industry

Technology

Official Sources

Source Evidence

Entity Name
"Verkada"
Fine Amount
"pay a $2.95 million monetary penalty"
Laws Cited
"CAN-SPAM Act"
Laws Cited
"Health Insurance Portability and Accountability Act of 1996 (HIPAA)"
Laws Cited
"EU-U.S. Privacy Shield framework"
Laws Cited
"Swiss-U.S. Privacy Shield framework"

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