Penalty Amount
$2,950,000
Consumers Affected
150,000
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.
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.
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.
Entity
Verkada
Industry
TechnologyOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2024/08/ftc-takes-action-against-security-camera-firm-verkada-over-charges-it-failed-secure-videos-other
2123068verkadajtmtnstipulatedorder
https://www.ftc.gov/system/files/ftc_gov/pdf/2123068verkadajtmtnstipulatedorder.pdf
2123068verkadacomplaint
https://www.ftc.gov/system/files/ftc_gov/pdf/2123068verkadacomplaint.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Verkada"
"pay a $2.95 million monetary penalty"
"CAN-SPAM Act"
"Health Insurance Portability and Accountability Act of 1996 (HIPAA)"
"EU-U.S. Privacy Shield framework"
"Swiss-U.S. Privacy Shield framework"
$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.
The FTC, along with Utah and California, filed a complaint against Hims & Hers alleging the telehealth provider shared consumers' sensitive health information with third-party advertising platforms without consent, and deceived consumers about billing and cancellation practices. The complaint alleges violations of the FTC Act and the Restore Online Shoppers' Confidence Act.