Industry News

Real estate lender settles data security charges

FTC alleges customer information was not secure
Published on Sep 29, 2005

Superior Mortgage Corp., a lender with 40 branch offices in 10 states and multiple Web sites, has agreed to settle Federal Trade Commission charges that it violated federal law by failing to provide reasonable security for sensitive customer data and falsely claiming that it encrypted data submitted online, the FTC announced Wednesday. The FTC's Safeguards Rule, enacted under the Gramm-Leach-Bliley Act, requires financial institutions, including lenders like Superior, to implement reasonable policies and procedures to ensure the security and confidentiality of sensitive customer information. Superior maintained customers' Social Security numbers, credit histories and credit card numbers, among other sensitive information. The FTC complaint alleges that Superior violated the Safeguards Rule because it: Failed to assess risks to its customer information until more than a year after the Safeguards Rule took effect; Failed to implement appropriate password policies to limit access to ...

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