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11/18/2004
12:41 PM
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Petco Settles FTC Security Charges

Pet-products retailer agrees to settle charges that flaws in its Web site violated security and privacy promises made to customers.

Petco Animal Supplies Inc. will spend the next 20 years making sure it doesn't once again end up in the doghouse over cybersecurity woes with the Federal Trade Commission.

Petco has agreed to settle FTC charges that flaws in its Web site violated security and privacy promises it made to customers within statements on its site. The FTC also accused Petco of not taking reasonable or appropriate steps to prevent cyberattacks.

While the settlement doesn't constitute an admission of guilt for a violation of law, it will require Petco to bolster its security and to submit to independent security inspections for the next 20 years.

The flaws in question, which allow for a common type of intrusion known as a SQL injection attack, could permit hackers to access customer records, including credit-card numbers, the FTC said. The FTC also alleged that Petco didn't protect sensitive customer information it stored with adequate encryption. "As a result, a hacker was able to penetrate the Petco Web site and access credit-card numbers stored in unencrypted clear text," the FTC said in a statement.

In a prepared statement, Petco said it's "committed to keeping all customer information obtained through our Web site and stores private and secure, and we have taken--and will continue to take--necessary measures to achieve that goal. ... We support the FTC's efforts to advocate and enforce enhanced online security measures for U.S. consumers and look forward to working with their staff to ensure that Petco continues meeting our commitment to keeping our customers' personal information secure."

This is the fifth time the FTC has successfully challenged deceptive claims made by businesses regarding their efforts to protect customer information. The previous cases included Eli Lilly, Guess, Microsoft, and Tower Records. Each case centered on promises the companies made in their privacy policies.

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