Cybersecurity

NYDFS issued a report last week concerning Facebook data privacy deficiencies, following a WSJ report that Facebook received sensitive user data from some popular apps, including a fertility-tracking app named “Flo,” for use in Facebook’s analytics tool.
– Facebook’s subsidiary, Facebook Payments Inc., is licensed as a money transmitter but the report found Facebook Payments “had no involvement in the privacy issues examined.” Since Facebook, the parent, indicated its willingness to cooperate “fully” the parties sought to avoid any clash about jurisdictional issues.
– NYDFS found that, while Facebook had taken steps to remediate, such as building a screening tool that would reject sensitive health information, it failed to “engage fully” with respect to other remediation proposals, and its effort to enforce its own policies against collection of sensitive data was “seriously lacking.”
– In January 2021, the Federal Trade Commission reached a proposed settlement with “Flo,” the fertility tracking app, requiring it to keep promises about user privacy.
– NYDFS argues this is another incident demonstrating the need for greater regulation on the federal and state level.

The NYDFS report can be found here: https://www.dfs.ny.gov/system/files/documents/2021/02/facebook_report_20210218.pdf

The proposed Consent Order and Complaint for the Flo Health matter can be found here: https://www.ftc.gov/enforcement/cases-proceedings/1923133/flo-health-inc

On March 9, 2021 NYDFS issued another cybersecurity alert to regulated entities. It disclosed that in recent days thousands of organizations were compromised via zero-day (newly discovered) vulnerabilities in the Microsoft Exchange Server. Microsoft made patches available for these vulnerabilities on March 2 but many organizations apparently were compromised before the patches were either available or applied. NYDFS is urging all regulated entities with vulnerable Microsoft Exchange services to act immediately by patching or disconnecting vulnerable servers. CISA has also released a current activity update outlining how to search for the type of compromise identified.

The alert may be found here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202103092

On March 30 2021 NYDFS issued a followup cybercrime alert: “This cybercrime campaign is a serious threat to the personal information of New Yorkers, and we urge all personal lines insurers and other financial services companies to take aggressive action to prevent the further loss of consumer information. All financial services companies should immediately check for any evidence of this cybercrime and ensure that they have implemented [] the robust access controls required by DFS’s cybersecurity regulation, 23 NYCRR 500.”

https://www.dfs.ny.gov/industry_guidance/industry_letters/il20210330_cyber_alert_followup