Wyndham Hotels Hit with FTC Data Breach Lawsuit

U.S. regulators have filed lawsuit against Wyndham Worldwide Corp. and three subsidiaries over a series of several data breaches that allegedly led to the loss of $10 million to fraud. The Federal Trade Commission alleges the hospitality company failed to safeguard consumers’ personal information, and is seeking restitution for consumers in the form of a class action lawsuit settlement.  

According to the FTC’s complaint, repeated failures by Wyndham to secure consumer data led to hundreds of thousands of consumers’ credit card and debit card information being exported to an Internet domain registered in Russia. Wyndham operates several hotel brands, including Days Inn, Super 8, Ramada, Travelodge, Howard Johnson, Wingate, Planet Hollywood, and more.

The FTC says fraudulent charges on Wyndham’s consumer accounts totaled more than $10.6 million following three data breaches in less than two years. The data breaches occurred in April 2008, March 2009 and in late 2009. The FTC is alleging Wyndhams’ failure to safeguard its customers’ data violates its own policies as well as the FTC Act, which bars unfair and deceptive practices.

“Even after faulty security led to one breach… Wyndham still failed to remedy known security vulnerabilities; failed to employ reasonable measures to detect unauthorized access; and failed to follow proper incident response procedures,” the FTC said in the class action lawsuit, which is seeking restitution for consumers who lost money during the data breach as well as a court-order requiring Wyndham to live up to its privacy policies.

A Wyndham spokesman said the company offered affected customers credit-monitoring services and also strengthened its security systems following the data breaches. He said Wyndham was unaware of any customers losing money because of the breach.

The Wyndham Data Breach Class Action Lawsuit case is Federal Trade Commission v. Wyndham Worldwide Corporation, et al., Case No. 12-cv-1365, U.S. District Court for the District of Arizona.