FTC Fines VTec $650K for Data Breach

DooKey

DooKey

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The FTC recently completed their investigation of VTech's 2015 data breach that exposed data on millions of parents and their children. The FTC validated that VTech did break the law and they fined this huge company a whopping $650K. This fine is a simple slap on the wrist and is a perfect example of why companies aren't taking our privacy more seriously. In my opinion, Congress needs to get a move on and tighten up the laws, raise the fines, and establish jail sentences for violators.

As of November 2015, about 2.25 million parents had registered and created accounts with Learning Lodge for nearly 3 million children. This included about 638,000 Kid Connect accounts for children. In addition, about 134,000 parents in the United States created Planet VTech accounts for 130,000 children by November 2015.
 
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I would still like to know where all the money from these fines goes to. I can guarantee 110% that none of it goes to the people that actually purchased the products.

Whose pockets are being lined with gold?

All it ends up doing is possibly making these companies that get fined raise prices a bit and/or use them as a tax write-off.
 
The defendants in this case are a Hong Kong based company and another associated LLC in Delaware.

I'm not sure that the FTC held out much hope to get any money out of the China based and owned business, and I bet the Delaware LLC is just a front for it's US business. I doubt they will even get the money they are demanding. The Delaware LLC will shut it's doors and the Hong Kong outfit where the "products" are created will just change their name, rewrite their stuff and start again.

The only thing worthwhile in this case that might happen is that the company will be stopped for awhile and when they show up again under a new name they might try doing it right. But if they made more money doing it wrong and it was worth the makeover, they'll just recreate the wheel.

I think just shutting them down was the most that could be hoped for in this case.
 
wow. I think my student loans are higher than that. (not really, but come on)
 
lcpiper said:
The defendants in this case are a Hong Kong based company and another associated LLC in Delaware.

I'm not sure that the FTC held out much hope to get any money out of the China based and owned business, and I bet the Delaware LLC is just a front for it's US business. I doubt they will even get the money they are demanding. The Delaware LLC will shut it's doors and the Hong Kong outfit where the "products" are created will just change their name, rewrite their stuff and start again.

The only thing worthwhile in this case that might happen is that the company will be stopped for awhile and when they show up again under a new name they might try doing it right. But if they made more money doing it wrong and it was worth the makeover, they'll just recreate the wheel.

I think just shutting them down was the most that could be hoped for in this case.
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VTech has been around for years, since 1976. I highly doubt that they will even change their name.
 
Time for company's allowing these data breaches to occur and not notifying account holders in a timely manner to pay for a minimum of one year of identity theft protection and monetary awards, starting at $1,500 per account, to be paid to account holders and not the State!
 
Stock went up a few percent today so nobody cared about this. Given how much they make per year even if they pay this it won't mean much.
 
Montu said:
The FTC recently completed their investigation of VTech's 2015 data breach that exposed data on millions of parents and their children. The FTC validated that VTech did break the law and they fined this huge company a whopping $650K. This fine is a simple slap on the wrist and is a perfect example of why companies aren't taking our privacy more seriously. In my opinion, Congress needs to get a move on and tighten up the laws, raise the fines, and establish jail sentences for violators.

As of November 2015, about 2.25 million parents had registered and created accounts with Learning Lodge for nearly 3 million children. This included about 638,000 Kid Connect accounts for children. In addition, about 134,000 parents in the United States created Planet VTech accounts for 130,000 children by November 2015.
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650k is hardly a "whopping" fine. Try more like a slap on the wrist considering they have cleared of profit of 200 million in FY14...thats less than 1%. Its a write off.
 
FTC is setting a terrible example with this. CFOs will be like "Damn only a 650k dollar fine to get breached? Screw this 2 million dollar security program, lets just pay fines.".
 
kju1 said:
650k is hardly a "whopping" fine. Try more like a slap on the wrist considering they have cleared of profit of 200 million in FY14...thats less than 1%. Its a write off.
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only hope is that china goes after them next which would be a whole lot worse for them.
 
cyclone3d said:
I would still like to know where all the money from these fines goes to. I can guarantee 110% that none of it goes to the people that actually purchased the products.

Whose pockets are being lined with gold?

All it ends up doing is possibly making these companies that get fined raise prices a bit and/or use them as a tax write-off.
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Well, the one saving grace is that at least we know it won't be going to social justice groups that had absolutely zero to do with the case. That practice was put to an end last year.
 
katanaD said:
but just how many years of concurrent coverage do you need? LOL
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Not just for your entire life, but all eternity. Long after you are dead, your identity will live on and flourish. So many have become legend in the FCC database supporting the removal of net neutrality.
 
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If customer's money had been stolen, does anybody think the punishment would be this mild?
 
Exavior said:
Stock went up a few percent today so nobody cared about this. Given how much they make per year even if they pay this it won't mean much.
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An FTC win opens the door to civil cases, the class action is next, not that the users will get anything.
 
katanaD said:
but just how many years of concurrent coverage do you need? LOL
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Look at it like an antivirus app. Sometimes one app catches the 3%-5% missed by the only always left running;) I figure 4+ concurrent subscriptions from different agencies ought to keep people safe, even if they generate a few false positives in the process:D lol
 
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