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"
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$2.5B
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