Penalty Amount
$3,500,000
New Jersey joined 31 other states and the FTC in a $3.5 million settlement with Lenovo for pre-installing VisualDiscovery ad software on laptops that created a 'man-in-the-middle' security vulnerability, intercepting users' encrypted data without adequate disclosure or opt-out mechanisms. The settlement requires Lenovo to improve transparency, obtain affirmative consent, provide effective opt-out tools, and implement a long-term security compliance program with independent audits.
Lenovo must pay $3.5 million total to the states, change disclosures about pre-installed advertising software, obtain a consumer's affirmative consent before enabling such software, provide a reasonable and effective means to opt-out, disable, or remove it, and implement and maintain a software security compliance program with initial and biennial third-party assessments for 20 years.
In-house legal teams should review vendor agreements with software providers (e.g., Superfish) for data sharing and security representations, customer end-user license agreements (EULAs) and terms of service for pre-installed software disclosures and consent mechanisms, and any data processing agreements. Specific clauses to scrutinize include those governing pre-installation of third-party software, data interception and security representations, consumer consent and opt-out procedures, and audit rights. Changes may be needed to mandate explicit, affirmative consent before enabling such software, require clear and accessible opt-out tools, implement mandatory security audits and compliance programs, and enhance transparency about pre-installed applications and associated risks.
Entity
Lenovo Inc.
Also known as: Lenovo
Industry
Technology"settlement with Lenovo Inc."
"$3.5 million settlement"
"violated state consumer protection laws"
"VisualDiscovery operated by acting as a local proxy, or "man in the middle," that stood between the consumer's browser and all Internet web sites that the user visited, including encrypted sites. This technique allowed the software to see all of a user's sensitive personal information that was transmitted on the Internet. Consumer information– including sensitive communications with encrypted Web sites– would be collected and transmitted to Superfish."
"Lenovo's failure to disclose the presence of VisualDiscovery on its computers, its failure to warn consumers that the software created a security vulnerability and its inadequate opt-out procedure violated state consumer protection laws."
$18.0M
Attorney General Jennifer Davenport joined a bipartisan coalition of 42 attorneys general in announcing a settlement with the bankruptcy trustee for 23andMe, resolving allegations from a 2023 data breach that compromised genetic data of 6.9 million people worldwide, including nearly 150,000 in New Jersey. The settlement provides $18 million to states from available bankruptcy funds, plus enhanced data security and consumer deletion rights for the successor entity, 23andMe Research Institute.
$45.0M
Block, Inc. agreed to a $45 million multistate settlement with 46 states for allegedly misleading consumers about the safety of Cash App, failing to protect users from fraud, and not providing promised fraud protection. The settlement requires Block to improve customer support, stop misleading claims, and educate consumers about fraud.
Attorney General Jennifer Davenport co-led a coalition of 49 attorneys general in calling on the FCC to strengthen rules to cut off scammers' access to legitimate telephone numbers. The coalition's letter requests stronger certification rules, regular reporting, and prohibitions on number cycling to combat illegal robocalls.
Governor Sherrill and Attorney General Davenport announced coordinated executive actions to reduce and eliminate junk fees in New Jersey. The initiative includes an Executive Order directing state agencies to review industries for junk fees and an Enforcement Statement from the Division of Consumer Affairs explaining how junk fee practices may violate the New Jersey Consumer Fraud Act.
The New Jersey Bureau of Securities announced its 2026 annual investment adviser examination, with a particular focus on firms' use of artificial intelligence and cybersecurity protocols. The examination requires nearly 800 registered investment adviser firms to answer questions about AI use in portfolio management, data protection policies, and third-party vendor due diligence. Failure to comply may result in administrative action.
The New Jersey Bureau of Securities filed a lawsuit against Xiao Hu (aka Mark Hu) and his companies Skyline Technology USA LLC and Thunderbirds.ME, Inc. for allegedly defrauding at least 15 investors out of $2.5 million through unregistered securities offerings. Hu allegedly misappropriated at least $280,000 for personal expenses including a home purchase and vacation, and falsely claimed to have a Ph.D. from Columbia University.