Guess Settles FTC Security Charges

June 18, 2003
Guess, Incorporated has agreed to settle Federal Trade Commission (FTC) charges that it exposed consumers' personal information, including credit card numbers, to commonly known attacks by hackers.

The agency alleges that Guess didn't use reasonable or appropriate measures to prevent consumer information from being accessed at its Web site, Guess.com. The settlement will require that Guess implement a comprehensive information security program for Guess.com and its other Web sites.

"Consumers have every right to expect that a business that says it's keeping personal information secure is doing exactly that," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "It's not just good business, it's the law," he said.

Guess has sold Guess-brand clothing and accessories online at www.guess.com since 1998. According to the FTC complaint, since at least October 2000, Guess' Web site has been vulnerable to commonly known attacks such as "Structured Query Language (SQL) injection attacks" and other web-based application attacks.

Guess' online statements reassured consumers that their personal information would be secure and protected. The company's claims included "This site has security measures in place to protect the loss, misuse, and alteration of information under our control" and "All of your personal information, including your credit card information and sign-in password, are stored in an unreadable, encrypted format at all times."

In fact, according to the FTC, the personal information was not stored in an unreadable, encrypted format at all times and Guess' security measures failed to protect against SQL and other commonly known attacks. In February 2002, a vistor to the Web site, using an SQL injection attack, was able to read in clear text credit card numbers stored in Guess' databases, according to the FTC.

The Guess settlement prohibits the company from misrepresenting the extent to which it maintains and protects the security of personal information collected from or about consumers. It also requires that Guess establish and maintain a comprehensive information security program. In addition, Guess must have its security program certified as meeting or exceeding the standards in the consent order by an independent professional within a year, and every other year thereafter.

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