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

CafePressJune 24, 2022Federal Trade Commission

Penalty Amount

$500,000

Summary

The FTC finalized an order against CafePress for failing to secure consumer data and covering up a data breach. The company must implement comprehensive security measures, and its former owner must pay $500,000 in redress to victims.

Remedy

CafePress and its owners must implement a comprehensive information security program including multifactor authentication, data minimization, encryption of SSNs, and third-party security assessments. Residual Pumpkin must pay $500,000 for victim redress, and PlanetArt must notify affected consumers.

Monetary PenaltyInjunctionConsent DecreeAudit RequirementCompliance Program

Contract Impact

In-house legal teams should review vendor agreements (with platforms like CafePress) and customer agreements to ensure robust data security and breach response clauses. Specifically, examine sections on data security standards, breach notification timelines and procedures, data retention and disposal policies, encryption specifications, and audit rights. Given the findings—storing sensitive data (e.g., SSNs) in plaintext, excessive data retention, and failure to implement known protections—contracts may need amendments to mandate regular security audits, require industry-standard encryption, limit data retention to necessary periods, and impose clear, prompt breach notification obligations with defined penalties for non-compliance.

Contract Search Terms

data security measuresbreach notification clausedata retention policyencryption requirementsincident response planaudit rightsindemnification for data breachesthird-party security assessmentsdata processing addendumsecure data storage

Violation Types

Entity Details

Entity

CafePress

Industry

Retail

Official Sources

Source Evidence

Entity Name
"finalized an order against CafePress"
Fine Amount
"Residual Pumpkin must pay $500,000"
Violation Types
"failed to implement reasonable security measures to protect the sensitive information of buyers and sellers stored on its network and failed to adequately respond to several security breaches."

Related Enforcement Actions

FTC

CafePress

$370K

The FTC settled with CafePress for failing to implement reasonable data security measures, leading to multiple breaches that exposed Social Security numbers and other sensitive data. As part of the settlement, over $370,000 in refunds are being distributed to 20,044 consumers who filed valid claims.

NJ

CafePress

$2.0M

New Jersey joined a multistate $2 million settlement with online retailer CafePress over a 2019 data breach that exposed personal information of approximately 22 million consumers nationwide, including over 540,000 in New Jersey. The settlement requires CafePress to implement a comprehensive cybersecurity program, incident response plan, and third-party assessments for five years, with payment suspended pending compliance.

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