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Consent DecreeMedium Risk

FTC Orders CafePress to Pay $500K Over Data Breach Cover-Up

Residual Pumpkin Entity, LLC and PlanetArt, LLCMarch 15, 2022Federal Trade Commission

Penalty Amount

$500,000

Summary

The FTC took action against CafePress for failing to secure consumer data and covering up a major data breach. The company stored sensitive information insecurely and delayed notifying customers. As part of the settlement, Residual Pumpkin must pay $500,000 in redress, and both companies must implement comprehensive security programs.

Remedy

The settlement requires Residual Pumpkin to pay $500,000 to compensate affected small businesses. Both companies must implement comprehensive information security programs, including multi-factor authentication and data minimization. They must also notify affected consumers and undergo third-party security assessments.

Consent DecreeConsumer RefundsAudit RequirementCompliance ProgramCorrective Notice

Contract Impact

In-house legal teams should review all agreements involving the handling of consumer or small business data, including vendor contracts (especially IT/cloud service providers), customer terms of service, and data processing addendums. Focus on clauses governing data security obligations, breach notification timelines (including requirements to notify customers and regulators), data storage/encryption standards, audit rights to verify security practices, and indemnification provisions for data breaches. Given the FTC's order requiring specific controls like multi-factor authentication and comprehensive security programs, contracts may need amendments to mandate these technical safeguards, establish regular security assessments, clarify redress mechanisms for affected parties, and potentially adjust liability caps to reflect heightened security responsibilities.

Contract Search Terms

data security programbreach notification clausemulti-factor authentication requirementencryption standardsdata retention scheduleincident response planaudit rightsindemnification for data breachesliability limitationsubprocessor management

Violation Types

Entity Details

Entity

Residual Pumpkin Entity, LLC and PlanetArt, LLC

Also known as: CafePress

Industry

Technology

Official Sources

Source Evidence

Entity Name
"Residual Pumpkin Entity, LLC, the former owner of CafePress, and PlanetArt, LLC, which bought CafePress in 2020"
Fine Amount
"Residual Pumpkin to pay $500,000 in redress to victims of the data breaches"
Violation Types
"CafePress employed careless security practices and concealed multiple breaches from consumers."

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Residual Pumpkin Entity, LLC and PlanetArt, LLC

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The FTC settled with CafePress's former owner Residual Pumpkin Entity, LLC and buyer PlanetArt, LLC over data security failures that led to a breach exposing Social Security numbers and other sensitive data. Residual Pumpkin paid $500,000 for victim compensation, and both companies must implement comprehensive security programs. A claims process is open for affected consumers until March 10, 2024.

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