Hilton Reaches $700,000 Settlement Over Data Breaches

U.S. hotel chain Hilton has reached a settlement with the states of New York and Vermont over the payment card breaches suffered by the company in 2014 and 2015.

Hilton has agreed to pay $700,000 – $400,000 to New York and $300,000 to Vermont – and promised to take steps to improve its data security and breach disclosure practices.

The Attorneys General of New York and Vermont launched an investigation into two separate security incidents reported by Hilton back in 2015. The hotel chain determined at the time that attackers had accessed information on at least 363,000 credit cards.

The first intrusion was discovered on February 10, 2015, when a computer services provider informed Hilton of suspicious traffic from one of its systems. An investigation revealed that malware designed to steal payment card data had been active on the company’s systems between November 18 and December 5, 2014.

In the second intrusion, discovered in July 2015, attackers used a piece of malware to collect more than 363,000 payment card numbers between April 21 and July 27, 2015. Investigators discovered the data in a file that had been prepared for exfiltration.

However, Hilton only informed customers about the breaches in November 2015, more than 9 months after the first intrusion was discovered. Hilton argued that there had been no evidence that the payment card data was actually exfiltrated by the attackers, but investigators were unable to review all logs due to steps taken by the cybercriminals to cover their tracks.

Authorities were displeased with the fact that it took the company so long to alert customers. In accordance with New York’s General Business Law, organizations must disclose data breaches in the “most expedient time possible and without unreasonable delay,” which Hilton did not do.

The investigation conducted by the Vermont and New York Attorneys General also revealed that Hilton had not been in compliance with certain requirements of the Payment Card Industry Data Security Standard (PCI DSS).

Authorities also determined that Hilton broke laws prohibiting deceptive acts and practices by telling customers that their personal information was protected using reasonable data security mechanisms.

As part of the settlement, in addition to paying $700,000, Hilton has agreed to notify consumers faster in case of future incidents, create and maintain a comprehensive data security program, and perform annual assessments for PCI DSS compliance.

Hilton is just one of the many hotel chains that suffered payment card breaches in the past few years. The list also includes Hyatt, Trump, Millennium, InterContinental, Omni, Mandarin Oriental, and Kimpton hotels.