Tag: Consumer protection and advocacy

Taylor Swift tickets breakdown probed by attorneys general

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NASHVILLE, Tenn. — The breakdown in Ticketmaster’s sales of Taylor Swift tickets is a mess some attorneys general aren’t shaking off.

With fans sharing outrage and heartache over the fruitless hours they spent trying for seats for Swift’s upcoming concert tour, top legal chiefs in Nevada, Tennessee and Pennsylvania have launched investigations into the fiasco.

“Trouble, trouble, trouble,” tweeted Pennsylvania Attorney General Josh Shapiro in a reference to Swift’s 2012 hit song ‘I Knew You Were Trouble’ as he asked the public to file complaints about using Ticketmaster with his office.

Shapiro, a Democrat who recently won Pennsylvania’s governor race, has since thanked people for their “swift response” while noting his office had received “a lot of complaints” to look into.

Over in Tennessee, Attorney General Jonathan Skrmetti said he wants to ensure consumers have a fair shot at buying tickets.

“There are no allegations at this time of any misconduct, but as the attorney general it’s my job to ensure that the consumer protection laws and antitrust laws in Tennessee are being honored,” Skrmetti told reporters.

In 2008, Tennessee enacted a so-called “anti-bot” law that prohibits using certain computer programs to buy large amounts of tickets to concerts and sporting events. However, like most states that have passed similar bans, the law has rarely been enforced.

Meanwhile, in Nevada, the attorney general’s office said it was investigating Ticketmaster for “alleged deceptive or unfair trade practices.”

The trouble began when registered fans given codes for a pre-sale on Tuesday tried to secure tickets for Swift’s 52-date The Eras tour next year. They were quickly met with long delays and error messages that Ticketmaster blamed on bots and historically unprecedented demand. The company then canceled Friday’s sales to the general public.

Swift vented anger and frustration in a lengthy statement, saying she had been assured by Ticketmaster that they could handle the demand.

“It’s really difficult for me to trust an outside entity with these relationships and loyalties, and excruciating for me to just watch mistakes happen with no recourse,” Swift said.

Ticketmaster said more than 2 million tickets were sold despite the troubles, setting a new single-day record for artists on the platform, and that only 15% of would-be buyers had issues with the process.

“We want to apologize to Taylor and all of her fans – especially those who had a terrible experience trying to purchase tickets,” the company said.

Multiple lawmakers have accused Ticketmaster of abusing its power as the dominant ticket-seller for consumers.

U.S. Sen. Amy Klobuchar, who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, wrote an open letter to Ticketmaster’s President and CEO Michael Rapino, saying that she’s been skeptical of his company ever since they merged with LiveNation in 2011. Her letter included several questions about Ticketmaster’s business practices that she asked Rapino answer by next week.

Asked about reports that the Justice Department would investigate Live Nation, White House press secretary Karine Jean-Pierre declined to comment on specifics, but said President Joe Biden has worked to increase competition and limit the power of large corporations, believing that a “lack of competition leads to higher prices, and worse service.”

———

Associated Press writer Aamer Madhani contributed to this report from Washington D.C.

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November 19, 2022
‘Zombie Debt’: Homeowners face foreclosure on old mortgages

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Rose Prophete thought the second mortgage loan on her Brooklyn home was resolved about a decade ago — until she received paperwork claiming she owed more than $130,000.

“I was shocked,” said Prophete, who refinanced her two-family home in 2006, six years after arriving from Haiti. “I don’t even know these people because they never contacted me. They never called me.”

Prophete is part of a wave of homeowners who say they were blindsided by the start of foreclosure actions on their homes over second loans that were taken out more than a decade ago. The trusts and mortgage loan servicers behind the actions say the loans were defaulted on years ago.

Some of these homeowners say they weren’t even aware they had a second mortgage because of confusing loan structures. Others believed their second loans were rolled in with their first mortgage payments or forgiven. Typically, they say they had not received statements on their second loans for years as they paid down their first mortgages.

Now they’re being told the loans weren’t dead after all. Instead, they’re what critics call “zombie debt” — old loans with new collection actions.

While no federal government agency tracks the number of foreclosure actions on second mortgages, attorneys aiding homeowners say they have surged in recent years. The attorneys say many of the loans are owned by purchasers of troubled mortgages and are being pursued now because home values have increased and there’s more equity in them.

“They’ve been holding them, having no communication with the borrowers,” said Andrea Bopp Stark, an attorney with the Boston-based National Consumer Law Center. “And then all of a sudden they’re coming out of the woodwork and are threatening to foreclose because now there is value in the property. They can foreclose on the property and actually get something after the first mortgages are paid off.”

Attorneys for owners of the loans and the companies that service them argue that they are pursuing legitimately owed debt, no matter what the borrower believed. And they say they are acting legally to claim it.

How did this happen?

Court actions now can be traced to the tail end of the housing boom earlier this century. Some involve home equity lines of credit. Others stem from “80/20” loans, in which homebuyers could take out a first loan covering about 80% of the purchase price, and a second loan covering the remaining 20%.

Splitting loans allowed borrowers to avoid large down payments. But the second loans could carry interest rates of 9% or more and balloon payments. Consumer advocates say the loans — many originating with since-discredited lenders — included predatory terms and were marketed in communities of color and lower-income neighborhoods.

The surge in people falling behind on mortgage payments after the Great Recession began included homeowners with second loans. They were among the people who took advantage of federal loan modification programs, refinanced or declared bankruptcy to help keep their homes.

In some cases, the first loans were modified but the second ones weren’t.

Some second mortgages at that time were “charged off,” meaning the creditor had stopped seeking payment. That doesn’t mean the loan was forgiven. But that was the impression of many homeowners, some of whom apparently misunderstood the 80/20 loan structure.

Other borrowers say they had difficulty getting answers about their second loans.

In the Miami area, Pastor Carlos Mendez and his wife, Lisset Garcia, signed a modification on their first mortgage in 2012, after financial hardships resulted in missed payments and a bankruptcy filing. The couple had bought the home in Hialeah in 2006, two years after arriving from Cuba, and raised their two daughters there.

Mendez said they were unable to get answers about the status of their second mortgage from the bank and were eventually told that the debt was canceled, or would be canceled.

Then in 2020, they received foreclosure paperwork from a different debt owner.

Their attorney, Ricardo M. Corona, said they are being told they owe $70,000 in past due payments plus $47,000 in principal. But he said records show the loan was charged off in 2013 and that the loan holders are not entitled to interest payments stemming from the years when the couple did not receive periodic statements. The case is pending.

“Despite everything, we are fighting and trusting justice, keeping our faith in God, so we can solve this and keep the house,” Mendez said in Spanish.

Second loans were packaged and sold, some multiple times. The parties behind the court actions that have been launched to collect the money now are often investors who buy so-called distressed mortgage loans at deep discounts, advocates say. Many of the debt buyers are limited liability companies that are not regulated in the way that big banks are.

The plaintiff in the action on the Mendez and Garcia home is listed as Wilmington Savings Fund Society, FSB, “not in its individual capacity but solely as a Trustee for BCMB1 Trust.”

A spokeswoman for Wilmington said it acts as a trustee on behalf of many trusts and has “no authority with respect to the management of the real estate in the portfolio.” Efforts to find someone associated with BCMB1 Trust to respond to questions were not successful.

Some people facing foreclosure have filed their own lawsuits citing federal requirements related to periodic statements or other consumer protection laws. In Georgia, a woman facing foreclosure claimed in federal court that she never received periodic notices about her second mortgage or notices when it was transferred to new owners, as required by federal law. The case was settled in June under confidential terms, according to court filings.

In New York, Prophete is one of 13 plaintiffs in a federal lawsuit claiming that mortgage debt is being sought beyond New York’s six-year statute of limitations, resulting in violations of federal and state law.

“I think what makes it so pernicious is these are homeowners who worked very hard to become current on their loans,” said Rachel Geballe, a deputy director at Brooklyn Legal Services, which is litigating the case with The Legal Aid Society. “They thought they were taking care of their debt.”

The defendants in that case are the loan servicer SN Servicing and the law firm Richland and Falkowski, which represented mortgage trusts involved in the court actions, including BCMB1 Trust, according to the complaint. In court filings, the defendants dispute the plaintiff’s interpretation of the statute of limitations, say they acted properly and are seeking to dismiss the lawsuit.

“The allegations in the various mortgage foreclosure actions are truthful and not misleading or deceptive,” Attorney Daniel Richland wrote in a letter to the judge. “Plaintiff’s allegations, by contrast, are implausible and thus warrant dismissal.”

———

Associated Press writer Claudia Torrens and researcher Jennifer Farrar in New York contributed to this report.

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November 16, 2022
‘Zombie Debt’: Homeowners face foreclosure on old mortgages

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Rose Prophete thought the second mortgage loan on her Brooklyn home was resolved about a decade ago — until she received paperwork claiming she owed more than $130,000.

“I was shocked,” said Prophete, who refinanced her two-family home in 2006, six years after arriving from Haiti. “I don’t even know these people because they never contacted me. They never called me.”

Prophete is part of a wave of homeowners who say they were blindsided by the start of foreclosure actions on their homes over second loans that were taken out more than a decade ago. The trusts and mortgage loan servicers behind the actions say the loans were defaulted on years ago.

Some of these homeowners say they weren’t even aware they had a second mortgage because of confusing loan structures. Others believed their second loans were rolled in with their first mortgage payments or forgiven. Typically, they say they had not received statements on their second loans for years as they paid down their first mortgages.

Now they’re being told the loans weren’t dead after all. Instead, they’re what critics call “zombie debt” — old loans with new collection actions.

While no federal government agency tracks the number of foreclosure actions on second mortgages, attorneys aiding homeowners say they have surged in recent years. The attorneys say many of the loans are owned by purchasers of troubled mortgages and are being pursued now because home values have increased and there’s more equity in them.

“They’ve been holding them, having no communication with the borrowers,” said Andrea Bopp Stark, an attorney with the Boston-based National Consumer Law Center. “And then all of a sudden they’re coming out of the woodwork and are threatening to foreclose because now there is value in the property. They can foreclose on the property and actually get something after the first mortgages are paid off.”

Attorneys for owners of the loans and the companies that service them argue that they are pursuing legitimately owed debt, no matter what the borrower believed. And they say they are acting legally to claim it.

How did this happen?

Court actions now can be traced to the tail end of the housing boom earlier this century. Some involve home equity lines of credit. Others stem from “80/20” loans, in which homebuyers could take out a first loan covering about 80% of the purchase price, and a second loan covering the remaining 20%.

Splitting loans allowed borrowers to avoid large down payments. But the second loans could carry interest rates of 9% or more and balloon payments. Consumer advocates say the loans — many originating with since-discredited lenders — included predatory terms and were marketed in communities of color and lower-income neighborhoods.

The surge in people falling behind on mortgage payments after the Great Recession began included homeowners with second loans. They were among the people who took advantage of federal loan modification programs, refinanced or declared bankruptcy to help keep their homes.

In some cases, the first loans were modified but the second ones weren’t.

Some second mortgages at that time were “charged off,” meaning the creditor had stopped seeking payment. That doesn’t mean the loan was forgiven. But that was the impression of many homeowners, some of whom apparently misunderstood the 80/20 loan structure.

Other borrowers say they had difficulty getting answers about their second loans.

In the Miami area, Pastor Carlos Mendez and his wife, Lisset Garcia, signed a modification on their first mortgage in 2012, after financial hardships resulted in missed payments and a bankruptcy filing. The couple had bought the home in Hialeah in 2006, two years after arriving from Cuba, and raised their two daughters there.

Mendez said they were unable to get answers about the status of their second mortgage from the bank and were eventually told that the debt was canceled, or would be canceled.

Then in 2020, they received foreclosure paperwork from a different debt owner.

Their attorney, Ricardo M. Corona, said they are being told they owe $70,000 in past due payments plus $47,000 in principal. But he said records show the loan was charged off in 2013 and that the loan holders are not entitled to interest payments stemming from the years when the couple did not receive periodic statements. The case is pending.

“Despite everything, we are fighting and trusting justice, keeping our faith in God, so we can solve this and keep the house,” Mendez said in Spanish.

Second loans were packaged and sold, some multiple times. The parties behind the court actions that have been launched to collect the money now are often investors who buy so-called distressed mortgage loans at deep discounts, advocates say. Many of the debt buyers are limited liability companies that are not regulated in the way that big banks are.

The plaintiff in the action on the Mendez and Garcia home is listed as Wilmington Savings Fund Society, FSB, “not in its individual capacity but solely as a Trustee for BCMB1 Trust.”

A spokeswoman for Wilmington said it acts as a trustee on behalf of many trusts and has “no authority with respect to the management of the real estate in the portfolio.” Efforts to find someone associated with BCMB1 Trust to respond to questions were not successful.

Some people facing foreclosure have filed their own lawsuits citing federal requirements related to periodic statements or other consumer protection laws. In Georgia, a woman facing foreclosure claimed in federal court that she never received periodic notices about her second mortgage or notices when it was transferred to new owners, as required by federal law. The case was settled in June under confidential terms, according to court filings.

In New York, Prophete is one of 13 plaintiffs in a federal lawsuit claiming that mortgage debt is being sought beyond New York’s six-year statute of limitations, resulting in violations of federal and state law.

“I think what makes it so pernicious is these are homeowners who worked very hard to become current on their loans,” said Rachel Geballe, a deputy director at Brooklyn Legal Services, which is litigating the case with The Legal Aid Society. “They thought they were taking care of their debt.”

The defendants in that case are the loan servicer SN Servicing and the law firm Richland and Falkowski, which represented mortgage trusts involved in the court actions, including BCMB1 Trust, according to the complaint. In court filings, the defendants dispute the plaintiff’s interpretation of the statute of limitations, say they acted properly and are seeking to dismiss the lawsuit.

“The allegations in the various mortgage foreclosure actions are truthful and not misleading or deceptive,” Attorney Daniel Richland wrote in a letter to the judge. “Plaintiff’s allegations, by contrast, are implausible and thus warrant dismissal.”

———

Associated Press writer Claudia Torrens and researcher Jennifer Farrar in New York contributed to this report.

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November 15, 2022
California settles with firm in Volkswagen emissions scandal

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SACRAMENTO, Calif. — California on Monday settled a lawsuit against a German company stemming from the emissions scandal that tarred Volkswagen in 2015 and Fiat Chrysler two years later.

German auto supplier Bosch will pay $25 million to settle allegations by the state and California Air Resources Board under a court complaint and settlement agreement, both filed Monday. A judge will need to sign off on the settlement.

Volkswagen and Fiat Chrysler installed “defeat devices” in nearly 100,000 diesel passenger vehicles sold in California, the state said previously. The devices made it seem like the vehicles were meeting emissions requirements as they were undergoing testing, but on the road they actually polluted at many times the legal limit.

The settlement stems from some Volkswagen and Fiat Chrysler diesel vehicles sold in the U.S. from model year 2016 and earlier.

The complaint filed Monday said Bosch knew or should have known that the automakers were violating environmental and consumer protection laws, and that Bosch broke consumer protection laws through its marketing of Volkswagen and Fiat Chrysler vehicles and its own diesel components.

“Bosch violated consumer trust when it gave Volkswagen and Fiat Chrysler the technology they needed to skirt state and federal emissions tests,” Attorney General Rob Bonta said in announcing the settlement.

The Air Resources Board’s executive officer, Steven Cliff, said the company’s technology “was at the heart of the automobile emissions cheating scandals at Volkswagen and Fiat Chrysler and that has led directly to increased emissions and unhealthful air, especially in neighborhoods suffering from persistent air pollution.”

Bosch said in a statement that it “neither acknowledges the validity of the claims … nor does it concede any liability.” But it said its “robust compliance systems, as well as its full cooperation” aided the settlement. It also said that since 2015, the company’s “already existing extensive compliance policies and procedures have been substantially enhanced.”

Aside from the $25 million, the settlement requires Bosch to make changes in its policies and procedures and to tell state officials if it discovers that a manufacturer will use or has used cheating technology.

California previously settled with Volkswagen for nearly $1.5 billion in environmental mitigation payments, investments in zero-emissions technology and other damages. The company also was required to buy back at least 85% of affected vehicles or make emissions modifications on those vehicles.

Fiat Chrysler paid more than $78 million and similarly was required to bring at least 85% of the affected vehicles into compliance.

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November 7, 2022
California settles with firm in Volkswagen emissions scandal

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SACRAMENTO, Calif. — California on Monday settled a lawsuit against a German company stemming from the emissions scandal that tarred Volkswagen in 2015 and Fiat Chrysler two years later.

German auto supplier Bosch will pay $25 million to settle allegations by the state and California Air Resources Board under a court complaint and settlement agreement, both filed Monday. A judge will need to sign off on the settlement.

Volkswagen and Fiat Chrysler installed “defeat devices” in nearly 100,000 diesel passenger vehicles sold in California, the state said previously. The devices made it seem like the vehicles were meeting emissions requirements as they were undergoing testing, but on the road they actually polluted at many times the legal limit.

The settlement stems from some Volkswagen and Fiat Chrysler diesel vehicles sold in the U.S. from model year 2016 and earlier.

The complaint filed Monday said Bosch knew or should have known that the automakers were violating environmental and consumer protection laws, and that Bosch broke consumer protection laws through its marketing of Volkswagen and Fiat Chrysler vehicles and its own diesel components.

“Bosch violated consumer trust when it gave Volkswagen and Fiat Chrysler the technology they needed to skirt state and federal emissions tests,” Attorney General Rob Bonta said in announcing the settlement.

The Air Resources Board’s executive officer, Steven Cliff, said the company’s technology “was at the heart of the automobile emissions cheating scandals at Volkswagen and Fiat Chrysler and that has led directly to increased emissions and unhealthful air, especially in neighborhoods suffering from persistent air pollution.”

Bosch said in a statement that it “neither acknowledges the validity of the claims … nor does it concede any liability.” But it said its “robust compliance systems, as well as its full cooperation” aided the settlement. It also said that since 2015, the company’s “already existing extensive compliance policies and procedures have been substantially enhanced.”

Aside from the $25 million, the settlement requires Bosch to make changes in its policies and procedures and to tell state officials if it discovers that a manufacturer will use or has used cheating technology.

California previously settled with Volkswagen for nearly $1.5 billion in environmental mitigation payments, investments in zero-emissions technology and other damages. The company also was required to buy back at least 85% of affected vehicles or make emissions modifications on those vehicles.

Fiat Chrysler paid more than $78 million and similarly was required to bring at least 85% of the affected vehicles into compliance.

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November 7, 2022
Dominion, AG reach proposed agreement in offshore wind case

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RICHMOND, Va. — Dominion Energy has agreed to implement several consumer protections in connection with its massive offshore wind project under a proposed agreement with the office of the Virginia attorney general and other parties released Friday.

The proposed agreement, which includes performance reporting requirements and provisions laying out a degree of construction cost sharing, is still subject to final approval by the State Corporation Commission.

Attorney General Jason Miyares, a Republican whose office represents the interests of consumers in utility regulation proceedings, said the agreement would provide “first-of-its-kind” protections for ratepayers while ensuring the 176-turbine project with an estimated $9.8 billion capital cost moves forward in a fiscally responsible way.

“I am pleased that we have achieved consumer protections never seen before in modern Virginia history,” Miyares said in a statement. “For the first time Dominion has significant skin in the game to ensure that the project is delivered on budget. Should the project run materially over budget, it will come out of Dominion’s pocket, not consumers,” he said.

Dominion filed its application to build and recover the costs of the project with the State Corporation Commission nearly a year ago. That kicked off a lengthy process before the regulatory agency, one that has included voluminous filings and an evidentiary hearing in May.

The commission in August signed off on the project, but it included a consumer protection provision — a performance guarantee — that Dominion strenuously objected to, saying it would kill the project.

The parties to Friday’s proposal said they had conferred since then and reached the terms of the proposed agreement. It calls for a cost-sharing arrangement for any overruns beyond the estimated $9.8 billion price tag. The company would cover 50% of construction costs between the range of $10.3-$11.3 billion and 100% of costs between $11.3-$13.7 billion. If construction costs were to exceed $13.7 billion, the issue would go back to the commission.

The proposal would not require the company to guarantee certain energy production levels, like the SCC had initially ordered. Rather, Dominion will have to report average net capacity factors annually and “provide a detailed explanation of the factors contributing to any deficiency.” Capacity factor is a measure of how often a generating facility runs during a period of time.

Richmond-based Dominion said in a news release that the deal would provide “significant customer benefits.”

“I appreciate the thoughtful effort of all parties in reaching a constructive agreement to allow the project to continue moving forward,” said Bob Blue, Dominion’s chair, president and and chief executive officer.

Also parties to the agreement are Walmart, Virginia’s largest private employer, and two conservation groups: Appalachian Voices and the Southern Environmental Law Center.

Will Cleveland, an attorney for SELC, emphasized in a statement that the primary issue in the case was “never about offshore wind’s value but the risks created by the ownership structure.”

No other offshore wind project under development in the U.S. is funded by captive ratepayers, and no other project has a monopoly utility owner acting as its own general contractor, the law center said.

The project, which will be located about 27 miles off the coast of Virginia Beach, has drawn broad support from local officials, policymakers, business groups and trade unions, who say it will help fight climate change and create jobs.

The company already has a two-turbine pilot project up and running. The 2.6-gigawatt, utility-scale project’s schedule calls for construction to be complete in late 2026. Dominion expects the project to generate enough clean energy to power up to 660,000 homes.

Clean Virginia, an environmental and rate reform advocacy group that is a party to the proceeding, did not oppose the agreement, which it said in a statement represented a “vast improvement” for consumers.

“Absent pressure from environmental advocates, the Office of the Attorney General, regulatory staff, and Walmart, Dominion would have proceeded with one of the most expensive energy projects to date in Virginia with few consumer protections and would have faced little performance expectations to actually generate consistent clean energy,” Laura Gonzalez, the group’s energy policy manager, said in a statement.

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October 28, 2022
Drizly agrees to tighten data security after alleged breach

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WASHINGTON — Alcohol delivery app Drizly has agreed to tighten its data security and limit data collection to resolve federal regulators’ allegations that its security failures exposed the personal information of some 2.5 million customers.

The Federal Trade Commission announced the action Monday against Drizly, a Boston-based subsidiary of Uber that delivers beer, wine and spirits in states where it’s legal, and partners with retailers in hundreds of cities around the US. The proposed consent agreement with the FTC also names Drizly CEO James Cory Rellas. The regulators allege that the company and Rellas were alerted to security problems two years before the 2020 breach yet failed to act to protect consumers’ data.

Drizly agreed to put in a comprehensive data security program and establish security safeguards, and to limit future data collection or storage to that which is necessary for specific purposes. It will also destroy unnecessary data.

“Our proposed order against Drizly not only restricts what the company can retain and collect going forward but also ensures the CEO faces consequences for the company’s carelessness,” Samuel Levine, director of the FTC’s bureau of consumer protection, said in a statement. “CEOs who take shortcuts on security should take note.”

Drizly collects and stores on Amazon Web Services cloud-computing service a wide range of personal data from customers such as email and postal addresses, phone numbers, geolocation information and data purchased from third parties, according to the FTC.

“We take consumer privacy and security very seriously at Drizly, and are happy to put this 2020 event behind us,” the company said in a statement.

The proposed consent agreement will be opened to public comment for 30 days, after which the FTC will decide whether to make it final.

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October 24, 2022
Australia flags new corporate penalties for privacy breaches

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CANBERRA, Australia — Australia on Saturday proposed tougher penalties for companies that fail to protect customers’ personal data after two major cybersecurity breaches left millions vulnerable to criminals.

The penalties for serious breaches of the Privacy Act would increase from 2.2 million Australian dollars ($1.4 million) now to AU$50 million ($32 million) under amendments to be introduced to Parliament next week, Attorney-General Mark Dreyfus said.

A company could also be fined the value of 30% of its revenues over a defined period if that amount exceeded AU$50 million ($32 million).

Dreyfus said “big companies could face penalties up to hundreds of millions of dollars” under the new law.

“It is a very, very substantial increase in the penalties,” Dreyfus told reporters.

“It’s designed to make companies think. It’s designed to be a deterrent so that companies will protect the data of Australians,” he added.

Parliament resumes on Tuesday for the first time since mid-September.

Since Parliament last sat, unknown hackers stole personal data from 9.8 million customers of Optus, Australia’s second-largest wireless telecommunications carrier. The theft has left more than one-third of Australia’s population at heightened risk of identity theft and fraud.

Unknown cybercriminals this week demanded ransom from Australia’s largest health insurer, Medibank, after claiming to have stolen 200 gigabytes of customers’ data including medical diagnoses and treatments. Medibank has 3.7 million customers. The company said the hackers had proved they hold the personal records of at least 100.

The thieves have reportedly threatened to make public medical conditions of high-profile Medibank customers.

Dreyfus said both breaches had shown “existing safeguards are inadequate.”

As well as failing to protect personal information, the government is concerned that companies are unnecessarily holding too much customer data for too long in the hope of monetizing that information.

“We need to make sure that when a data breach occurs the penalty is large enough, that it’s a really serious penalty on the company and can’t just be disregarded or ignored or just paid as a part of a cost of doing business,” Dreyfus said.

Dreyfus hopes the proposed amendments will become law in the final four weeks that Parliament will sit this year.

Any new penalties will not be retroactive and will not effect Optus or Medibank.

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October 21, 2022
Australian police make first arrest in Optus hack probe

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CANBERRA, Australia — A police investigation of a cyberattack on an Australian telecommunications company in which the personal data of more than one third of Australia’s population was stolen has resulted in its first arrest, investigators said Thursday.

Police launched Operation Hurricane in cooperation with the U.S. Federal Bureau Investigation after Optus, Australia’s second-largest wireless carrier, lost the personal records of 9.8 million current and former customers on Sept. 21.

The hacker dumped the records of 10,000 of those customers on the dark web last week as part of an attempt to extort $1 million from Optus, a subsidiary of Singapore Telecommunications Ltd., also known as Singtel.

A 19-year-old Sydney man was arrested on Thursday and charged with using the dumped data in a text message blackmail scam, police said in a statement.

The man, who has not been identified publicly, has yet to appear in court on two charges that carry prison sentences of up to 10 and seven years.

Police allege he sent text messages to 93 Optus customers demanding 2,000 Australian dollars ($1,300) be deposed in a bank account or the data would be used in a financial crime. None of the targets paid.

One of the extortion targets, identified only as Belinda and described as a mother of a 5-year-old child with cancer, told Nine Network News last week, “To be honest, it’s just not what we need.”

“I guess they’re just trying to hopefully pressure people into paying,” she told Nine.

Australian Federal Police Assistant Commissioner Justine Gough said the investigation is continuing.

“The Hurricane investigation is a high priority for the AFP and we are aggressively pursuing all lines of inquiry to identify those behind the attack,” Gough said.

“Just because there has been one arrest does not mean there won’t be any more arrests,” she added.

The Australian government announced changes to its telecommunications law to protect vulnerable Optus customers.

The changes to the Telecommunications Regulations allow Optus and other providers to better coordinate with financial institutions and governments to detect and mitigate the risk of cybersecurity incidents, fraud, scams and other malicious cyber activities, a government statement said.

Optus ran full-page ads in Australian newspapers on Saturday under the headline, “We’re deeply sorry.”

The ad included a link to an Optus website that details actions that customers can take to avoid identity theft and fraud.

The government can change regulations without legislative approval. But the government hopes to pass changes to the Privacy Act in Parliament during the final four weeks of its 2022 session in response to the Optus breach.

The changes would include increased penalties for companies with lax cybersecurity protections and curbs on the quantities and types of customer data that businesses can amass, as well as the duration for which personal information can be kept.

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October 6, 2022
Australia updates law to protect data after Optus hack

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CANBERRA, Australia — The Australian government announced changes Thursday to its telecommunications law to protect vulnerable customers after personal details were stolen in a major cyberattack on the nation’s second-largest wireless carrier.

The changes to Telecommunications Regulations allow Optus and other providers to better coordinate with financial institutions and governments to detect and mitigate the risk of cybersecurity incidents, fraud, scams and other malicious cyber activities, Treasurer Jim Chalmers and Communications Minister Michelle Rowland said in a joint statement.

“What this is all about is to try and reduce the impact of this data breach on Optus customers and to enable financial institutions to implement enhanced safeguards and monitoring,” Rowland told reporters.

More than one in three Australians had personal data stolen when Optus lost the records of 9.8 million current and former customers including passport, driver’s license and national health care identification numbers in a hack discovered on Sept. 21.

The hacker dumped the records of 10,000 of those customers on the dark web last week as part of an attempt to extort $1 million from Optus, a subsidiary of Singapore Telecommunications Ltd., also known as Singtel.

Optus ran full-page ads in Australian newspapers on Saturday under the headline: “We’re deeply sorry.”

The ad included a link to an Optus website that details actions customers can take to avoid identity theft and fraud.

The government can change regulations without reference to the Parliament. But the government hopes to pass changes to the Privacy Act through the Parliament during its final four sitting weeks of 2022 in response to the Optus breach.

The changes would include increased penalties for companies with lax cybersecurity protections and curbs on the quantities and types of customer data that businesses can amass, as well as the duration for which personal information can be kept.

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October 5, 2022