Feds: Fandango Customers Were Vulnerable to Hackers, Identity Theft

The movie-ticket company and a credit-monitoring service settle FTC charges.

Fandango puppets
National Journal
Brendan Sasso
Add to Briefcase
Brendan Sasso
March 28, 2014, 10:28 a.m.

If you bought movie tick­ets between 2009 and 2013 on Fan­dango’s mo­bile app, your cred­it-card in­form­a­tion may have been an easy tar­get for hack­ers.

Fan­dango settled a law­suit with the Fed­er­al Trade Com­mis­sion on Fri­day over charges that it failed to take ba­sic steps to pro­tect user data on its app for iPhones and iPads.

Cred­it Karma, a cred­it-check­ing ser­vice, settled sim­il­ar charges Fri­day with the FTC for fail­ing to pro­tect mo­bile-app data.

Neither com­pany is re­quired to pay any fin­an­cial pen­alty as part of the set­tle­ments, al­though both Fan­dango and Cred­it Karma are re­quired to es­tab­lish “com­pre­hens­ive se­cur­ity pro­grams” and to un­der­go in­de­pend­ent se­cur­ity as­sess­ments every oth­er year for the next 20 years.

Ac­cord­ing to the law­suits, the com­pan­ies dis­abled a de­fault en­cryp­tion pro­cess, known as SSL cer­ti­fic­a­tion. As a res­ult, hack­ers could have eas­ily in­ter­cep­ted private in­form­a­tion, es­pe­cially on pub­lic Wi-Fi net­works of­ten found in cof­fee shops, shop­ping cen­ters, or air­ports, the FTC said.

Des­pite the vul­ner­ab­il­ity, Fan­dango as­sured cus­tom­ers that their cred­it card in­form­a­tion was safe as they checked out. Cred­it Karma claimed it was us­ing “in­dustry-lead­ing se­cur­ity pre­cau­tions.”

In a state­ment Fri­day, Fan­dango said it up­graded its se­cur­ity in March 2013 and that it is not aware of any cus­tom­ers who had their in­form­a­tion stolen.

“Se­cur­ity is among Fan­dango’s top pri­or­it­ies, and we are fully com­mit­ted to pro­tect­ing our cus­tom­ers’ per­son­al in­form­a­tion,” the com­pany said. “We have re­viewed and heightened our se­cur­ity pro­gram to pro­tect our cus­tom­ers’ per­son­al in­form­a­tion, across all of Fan­dango’s products and plat­forms, and we test reg­u­larly for data se­cur­ity.”

A Cred­it Karma spokes­man said the com­pany has ad­dressed the se­cur­ity is­sue and is not aware of any lost data.

FTC Chair­wo­man Edith Ramirez noted that con­sumers are in­creas­ingly re­ly­ing on mo­bile apps to make pur­chases and handle sens­it­ive fin­an­cial in­form­a­tion.

“Our cases against Fan­dango and Cred­it Karma should re­mind app de­velopers of the need to make data se­cur­ity cent­ral to how they design their apps,” she said.

Sen­ate Com­merce Com­mit­tee Chair­man Jay Rock­e­feller, Sen­ate Ju­di­ciary Com­mit­tee Chair­man Patrick Leahy, and oth­er law­makers are push­ing bills that would al­low the FTC to fine com­pan­ies for in­ad­equate data-se­cur­ity prac­tices.

The FTC is cur­rently in­vest­ig­at­ing Tar­get over last year’s massive hack of cred­it-card in­form­a­tion.

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