Consumers Affected
130,000
The FTC finalized a settlement with SkyMed International, Inc., an emergency travel services provider, for failing to secure sensitive consumer data and deceiving consumers about HIPAA compliance. The company left a cloud database with 130,000 membership records unsecured, containing personal and health information. Under the settlement, SkyMed must notify affected consumers, implement a security program, undergo biennial assessments, and is prohibited from misrepresenting its data practices.
SkyMed must send a notice to affected consumers, implement a comprehensive information security program, obtain biennial third-party assessments of its security program, and is prohibited from misrepresenting how it secures personal data, the circumstances of and response to a data breach, and whether it has been endorsed by or participates in any government-sponsored privacy or security program.
In-house legal teams should review all vendor agreements, customer contracts, and data processing addendums where SkyMed International, Inc. is a service provider handling personal or health information. Specific clauses to scrutinize include data security obligations, representations regarding regulatory compliance (especially HIPAA), breach notification requirements, audit and assessment rights, and restrictions on misleading marketing claims. Given the unsecured cloud database and false HIPAA seal, contracts may need amendments to mandate specific security frameworks (e.g., NIST, ISO 27001), require removal of unauthorized compliance seals, and incorporate mandatory biennial security assessments by a qualified third party. Additionally, ensure contracts clearly define data handling procedures for sensitive health information and establish robust consumer notification protocols for any security incident.
Entity
SkyMed International, Inc.
Also known as: SkyMed
Industry
HealthcareOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2021/02/ftc-gives-final-approval-settlement-emergency-travel-services-provider-related-allegations-it-failed
c 4732 skymed final order
https://www.ftc.gov/system/files/documents/cases/c-4732_skymed_final_order.pdf
skymed consent order ftc signed
https://www.ftc.gov/system/files/documents/cases/skymed_-_consent_order_ftc_signed.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"SkyMed International, Inc."
"Health Insurance Portability and Accountability Act (HIPAA)"
"failed to employ reasonable measures to secure the personal information"
"deceived consumers by displaying a 'HIPAA Compliance' seal"
SkyMed International, Inc. settled FTC allegations that it failed to secure sensitive consumer data, including health information, leaving a cloud database with 130,000 records exposed to the public. The FTC also alleged that SkyMed misrepresented HIPAA compliance on its website. As part of the settlement, SkyMed must implement a comprehensive security program, undergo biennial third-party assessments, and send notices to affected consumers.
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