Security vendor settles charges after getting hacked

Guidance Software settles charges with the US government after losing thousands of credit-card numbers to hackers.

Guidance Software, vendor of computer forensics and security products, has settled a complaint filed by the U.S. Federal Trade Commission (FTC), which accused it of failing to take reasonable security measures to protect sensitive computer data.

Guidance's lax security efforts, which allowed hackers to access sensitive credit-card information for thousands of customers, contradicted promises made on its Web site and violated U.S. law, the FTC said. The settlement, announced Thursday, will require the company to implement a comprehensive cybersecurity program and obtain independent security audits every other year for 10 years, the FTC said.

A Guidance spokeswoman didn't immediately return a phone call seeking a comment on the settlement.

In December 2005, the company informed customers that hackers had broken into a company database and stolen about 3,800 credit-card numbers apparently through a SQL injection attack. But security researchers had identified SQL injection attacks going back to 2000, and researchers had published multiple articles on how to protect against SQL injection attacks by 2005.

Although Guidance made claims about data security on its Web site, it stored credit-card information in clear, readable text, the FTC said. In addition, the company failed to access the vulnerability of its network to commonly known or reasonably foreseeable Web-based attacks such as the SQL injection attacks, the FTC said. The company failed to implement "simple, low-cost, and readily available defenses," the FTC said.

The settlement prohibits the company from misrepresenting security measures in the future. The company will be subject to record-keeping and reporting provisions to allow the FTC to monitor compliance.

This is the FTC's 14th case challenging faulty data-security practices by companies that handle sensitive consumer information.

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