What Does the Wyndham-FTC Settlement Mean for Travelers?

Not as much as we wanted.

Call it half a loaf – but, as usual, a half loaf is generally better than no loaf at all.

That’s the coda to the long running FTC actions against Wyndham, which operates Ramada, Days Inn, Super 8, Dream Hotels, and Wyndham Hotels. This got its start as far back as 2008 when, said the FTC, a team of Russian hackers breached Wyndham’s computers.

It got worse. According to the FTC the same gang returned in 2009 and made off with more account information. Wyndham suffered three breaches from the gang, by the FTC’s tally.

By the FTC’s reckoning, some 619,000 accounts were breached.

That is ugly.

It’s of course also too common in the hotel business, where recent months have seen Trump, Mandarin Oriental, Hilton, Starwood and White Lodging (for a second time)  victimized in breaches. Hundreds of thousands of us – maybe millions – have had our credit card data stolen from the hotels to whom we entrusted it.

Independent security experts have also told me that – in addition to the hotels known to have been breached – very probably there are many more that have been breached but so far the breach has gone undetected. What this comes down to is a fundamental failure by many hoteliers to take customer privacy seriously.  They insist on a guest offering a credit card on check in – I think it must be 40 years ago when I last checked in without proffering a credit card and in that case a Fortune 25 company’s travel department had booked the room and was on the hook for the charges.

And then the hotel too often fails to protect that credit card data.

The Wyndham-FTC dance is important because this is the breach that has made it into the courts and nobody had thrown out the FTC’s right to badger Wyndham.  So there was reason to hope for clarity and strong guidelines regarding a hotel’s obligation to protect guest personal and credit card information.

Did that happen?

In its press release the FTC said that Wyndham had settled with the agency.  It added: “The proposed stipulated federal court order requires Wyndham Hotels and Resorts to obtain annual security audits of its information security program that conform to the Payment Card Industry Data Security Standard for certification of a company’s security program.  In addition, the order requires Wyndham’s audit to:

     * certify the ‘untrusted’ status of franchisee networks, to prevent future hackers from using the same method used in the company’s prior breaches;

• certify the extent of compliance with a formal risk assessment process that will analyze the possible data security risks faced by the company;
• and certify that the auditor is qualified, independent and free from conflicts of interest.”

Probably the best bit is this: “The order also requires that in the event Wyndham suffers another data breach affecting more than 10,000 payment card numbers, they must obtain an assessment of the breach and provide that assessment to the FTC within 10 days.”  

Wyndham also agreed to follow this regimen for 20 years.

For its part, Wyndham, in a statement, said: “We are pleased to reach this settlement with the FTC, which does not hold Wyndham liable for any violations, nor require Wyndham to pay any monetary relief.”

What is especially annoying about the settlement is this: “The consent order applies only to payment card information, and does not apply to any other categories of personally identifiable information,” said Wyndham.

That would seem to mean that loyalty program information, driver’s license numbers, home addresses, phone numbers and much of the rest of the personal information collected at check-in is not covered by the settlement.

The FTC nonetheless applauded its outcome.  “This settlement marks the end of a significant case in the FTC’s efforts to protect consumers from the harm caused by unreasonable data security,” said FTC Chairwoman Edith Ramirez in a statement. “Not only will it provide important protection to consumers, but the court rulings in the case have affirmed the vital role the FTC plays in this important area.”

That just maybe is the plus.  The government apparently is gaining clout in going after companies that have been breached and it about time.  Because more companies – more hotels in particular – will be breached and we travelers need all the powerful friends we can gather to help protect our privacy.