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Guidance Software Enters a Settlement With FTC

On November 16, 2005, Guidance Software Inc. declared that it settled Federal Trade Commission (FTC) charges related to a security failure the same year that enabled hackers to capture credit card information of thousands of customers.

In December 2005, Guidance reported a case of database infiltration of a company by hackers to steal 3,800 credit card numbers that also included those of information security and law enforcement officers.

The Guidance case is the 14th one of the FTC's that has challenged firms with faulty data security.
Stating the failure of guidance to take reasonable security measures, FTC said that Guidance, a software developer for law enforcement agencies and corporations that use the programs to investigate network breaches, failed to adequately protect sensitive customer data. FTC further said that this failure "contradicted security promises made on its Web site" and bypassed federal law.
Federal Trade Commission complained that Guidance Software Inc. could not or did not enforce "simple, inexpensive and readily available security measures" to safeguard consumers' data. It also failed to take proper precautions to stop web attacks. Guidance was unable to spot illegal access to its network, an extremely embarrassing situation considering the nature of business Guidance is engaged with.

The settlement prohibits misrepresentations about future security measures and asks the company to set and maintain an all-encompassing information security program that should include administrative, technical and physical protections.

According to the settlement, the company must also obtain every two years for the coming ten years, an audit from a qualified, independent third-party professional to maintain its security program in compliance with the order's standards. The company must also execute standard record keeping and reporting rules to let the FTC regulate compliance.

According to a statement by John Colbert, CEO of Guidance Software, the company considers its customers' security a serious issue and is therefore dedicated to establish a comprehensive program framed to safeguard the security, confidentiality and integrity of its customers' private information. Guidance Software will, therefore, continue to employ an aggressive approach to data security and plans to move further beyond the requirements set forth in the agreement with FTC.

Related article: Getting Legitimate E-Mails Through Filters Is A Tough Job

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