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"
$750K
The FTC finalized an order against Vanilla Chip LLC (doing business as TruHeight) and its principals for deceptively advertising height-enhancing supplements for children and teens without scientific evidence. The company also used fake reviews and incentivized 5-star ratings. The order requires a $750,000 payment and prohibits false health claims and deceptive review practices.
$2.3M
The FTC alleged that RentGrow, a tenant screening company, violated the Fair Credit Reporting Act (FCRA) by failing to use reasonable procedures to ensure the accuracy of its reports, including by reporting duplicate records and failing to disclose data sources. RentGrow agreed to pay a $2.25 million penalty and is prohibited from further FCRA violations and from misrepresenting dispute outcomes.
The FTC and New York Attorney General took action against Handy Technologies for deceptive earnings claims and failure to disclose fees and fines that led to millions of dollars being withheld from workers' wages. The FTC is sending over $2.7 million in refunds to 62,893 affected consumers.
$35.0M
The FTC alleged that Hopper, a travel booking app, charged consumers hidden and pre-selected fees (Tip and VIP Support) without their consent, misrepresented the benefits of VIP Support and Price Freeze services, and failed to clearly disclose total prices. Hopper agreed to pay $35 million for consumer redress and is prohibited from misrepresenting fees under a proposed order.
$1.5M
The FTC finalized a settlement with Publishing.com LLC and its principals for misleading consumers about potential earnings from self-publishing products. The company will pay $1.5 million and is prohibited from making unsubstantiated earnings claims, failing to disclose refund terms, and misrepresenting endorsements and reviews.
The FTC is seeking public comment on a proposed policy statement addressing concerns that AI companies may be manipulating AI system outputs contrary to consumer expectations for objectivity and accuracy. The statement explains that such conduct could be considered deceptive under Section 5 of the FTC Act. The public comment period runs until July 31, 2026.