[ISN] Tower Records settles government charges over hacker attacks

From: InfoSec News (isn@private)
Date: Thu Apr 22 2004 - 00:10:50 PDT

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    http://www.detnews.com/2004/technology/0404/22/technology-129882.htm
    
    By Ted Bridis
    AP Technology Writer
    April 22, 2004
    
    WASHINGTON -- The company that operates the Web site for music
    retailer Tower Records has settled complaints by U.S. regulators that
    it allowed hackers in 2002 to steal personal information about
    thousands of its online customers.
    
    Under the agreement announced Wednesday, MTS Inc. of West Sacramento,
    Calif., must maintain a "reasonably designed" program to assure the
    security of customers to the Web site and hire outside consultants
    every two years during the next decade to test its security.
    
    The Federal Trade Commission said failure to abide by those terms
    could result in fines up to $11,000.
    
    The FTC said Tower Records, which emerged from bankruptcy last month,
    redesigned part of its Web site in November and December 2002 but
    failed to update one feature that customers used to check the status
    of their online purchase.
    
    Over eight days, hackers exploited the problem to view the names,
    addresses and purchase details for about 5,225 customers and sometimes
    wrote demeaning comments in Internet chat rooms about people's choices
    in music, the FTC said.
    
    Tower said in a statement that hackers did not steal any of its
    customers' credit card or Social Security numbers, that it corrected
    the problem and that it has not detected any subsequent break-ins.
    
    "We take the privacy and security of personal information collected
    from our customers very seriously," said Bill Baumann, Tower's chief
    information officer.
    
    The FTC, which traditionally prosecutes businesses for fraudulent and
    deceptive trade practices, sued Tower Records over its written
    assurances to customers that it protected their personal information
    using "state-of-the-art technology." Regulators said the vulnerability
    in the company's Web site was "commonly known and reasonably
    foreseeable."
    
    The case against Tower Records was the fourth of its kind by the FTC.
    
    "Companies must have reasonable procedures in place to make sure that
    changes do not create new vulnerabilities," said Howard Beales,
    director of the FTCs Bureau of Consumer Protection. "Just as consumers
    remodeling their homes would make sure that the doors still have
    locks, companies should make sure that sensitive data is still
    protected."
    
    
    
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