Trump hotel chain fined over data breaches

The chain, one of Donald Trump’s businesses, also delayed in reporting the breaches to consumers

Trump Hotel Collection has arrived at a settlement with New York Attorney General Eric T. Schneiderman over hacks that are said to have led to the exposure of over 70,000 credit card numbers and other personal data.

The hotel chain, one of the businesses of Republican presidential candidate Donald Trump, has agreed to pay US$50,000 in penalties and promised to take measures to beef up its data security practices, according to the attorney general’s office.

The chain is one of many hotels and retailers that have been hit recently by malware that skimmed payment card information.

The key charges apparently against Trump Hotel Collection (THC) are that it didn’t have adequate protection and even after the attacks became known, did not quickly inform the people affected, in breach of New York law.

“It is vital in this digital age that companies take all precautions to ensure that consumer information is protected, and that if a data breach occurs, it is reported promptly to our office, in accordance with state law," Schneiderman said in a statement Friday.

In May 2015, banks analyzed fraudulent credit card transactions and figured that THC was the last merchant where a legitimate transaction had been made using the cards, suggesting that the hotel chain had been targeted in a cyberattack that resulted in the compromise of credit card information.

Further investigations found that a person with access to legitimate domain administrator credentials had infiltrated the chain's payment processing system in May 2014 and planted malware for stealing credit card information, which was noticed in computer networks at multiple locations, including its New York, Las Vegas and Chicago hotels, according to the statement by the attorney general’s office.

THC could not be immediately reached for comment. Safeguarding customer data is a top priority for the company, a THC spokeswoman told The New York Times, pointing out that "cyber criminals seeking consumer data have recently infiltrated the systems of many organizations including almost every major hotel company.”

The New York officials are concerned that despite knowing about the breach in June 2015, THC informed customers only in late September of that year, through a notice on its website. The delay was in violation of New York’s General Business Law that requires quick notification to consumers without “unreasonable delay.”

Investigators also found on March 30 this year that THC had faced another breach with the attacker gaining access on Nov. 10 last year and installing malware for harvesting credit card information on 39 systems in five Trump hotel properties.

The hacker also connected on March 21 to a legacy payment system on the network of the Trump International Hotel & Tower New York, which included personal information of THC property owners, including the names and social security numbers of about 302 people. The hotel chain informed these people of the breach in June.

Trump Hotel also delayed in putting in place “two-factor authentication” for remote access to the THC network until April this year, although it had been recommended after investigations into the first hack. The measure may have prevented the second hack, according to the New York officials.

The settlement outlines several steps Trump Hotel has to take to strengthen the security of its computer networks, such as employee training, risk analysis and regular testing of controls and safeguards.

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John Ribeiro

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