Attorney General James Secures $300,000 from Online Sporting Goods Retailers for Failing to Protect Consumers’ Personal Information
Tennis Warehouse, Running Warehouse, Skate Warehouse, and Tackle Warehouse’s Weak Data Security Affected 2.5 Million Consumers
NEW YORK – New York Attorney General Letitia James secured $300,000 from Sports Warehouse Inc. (Sports Warehouse), an online sporting goods retailer for failing to protect 2.5 million consumers’ personal data. Sports Warehouse, which owns the online sporting goods websites Tennis Warehouse, Running Warehouse, Skate Warehouse, and Tackle Warehouse, had poor data security that left it vulnerable to a data breach in 2021 which compromised consumers’ private information, including credit card information and email addresses for more than 136,000 New Yorkers. As a result of this agreement, Sports Warehouse must pay $300,000 in penalties to the state and strengthen their cybersecurity measures to protect consumers’ private information.
“Sports Warehouse ran its companies without the adequate gear to protect online shoppers from cyberattacks, and today they are paying the price for compromising consumers’ digital privacy,” said Attorney General James. “When we buy tennis shoes or gym clothes online, we don’t expect thieves to run off with our credit card details or other personal information. New Yorkers deserve the peace of mind that their private information is secure, and we’ll continue to go after companies that violate this right and ensure they improve their data security practices.”
In 2021, an attacker gained access to Sports Warehouse’s subsidiary servers, apparently by attempting to identify login credentials through repeated trial and error. After gaining access to the companies’ servers, the attacker created several web shells to gain remote access to the Sports Warehouse companies’ commerce server, which contained payment card information for nearly every purchase made through their websites since 2002. The investigation by the Sports Warehouse companies found that the attacker had also accessed certain customers’ email addresses and passwords. In total, the attackers potentially accessed the non-expired payment card information of as many as 1,813,224 consumers, including 101,558 New Yorkers, and the login credentials of 1,180,939 consumers, including 82,757 New Yorkers.
The Office of the Attorney General (OAG) determined that the Sports Warehouse companies failed to adopt reasonable practices to protect consumers’ personal information. In particular, OAG found that Sports Warehouse companies failed to encrypt consumers’ private information on its servers and adopt appropriate data deletion practices.
As a result of today’s agreement, the Sports Warehouse companies must pay the state $300,000 in penalties and adopt measures to better protect the personal information of consumers going forward, including:
- Maintaining a comprehensive information security program that includes regular updates to keep pace with changes in technology and security threats and reporting security risks to the companies’ leadership;
- Encrypting the private information the companies collect, use, store, and maintain;
- Strengthening the requirements for customers’ passwords and hash all stored passwords;
- Developing a penetration testing program that includes regular testing of the companies’ network security; and,
- Updating their data collection and retention practices, including only collecting data to the minimum extent necessary to perform legitimate business functions and permanently deleting all such data when there is no longer a reasonably foreseeable business or legal purpose to retain such information.
This action builds on Attorney General James’ ongoing efforts to protect consumers’ personal information and hold companies accountable for having poor cybersecurity. Earlier this week, Attorney General James recouped $550,000 from a medical management company for failing to protect the private information of patients. Last month, Attorney General James released a comprehensive data security guide to help businesses better protect New Yorkers’ personal information. In December 2022, Attorney General James secured $200,000 from a student cap and gown producer, Herff Jones, for failing to protect consumers’ personal information. In October 2022, Attorney General James announced a $1.2 million agreement with the owner of SHEIN and Zoetop for failing to properly handle a data breach that compromised the personal information of millions of consumers nationwide. In June 2022, Attorney General James secured $400,000 from Wegmans and required the retailer to improve data storage security after a data breach exposed consumers’ personal information. In March 2022, Attorney General James issued a consumer alert advising T-Mobile customers to take appropriate steps to protect their personal information following a data breach.
This matter was handled by Assistant Attorney General Laura Mumm and Deputy Bureau Chief Clark Russell, with special assistance from Internet and Technology Analyst Nishaant Goswamy, of the Bureau of Internet and Technology, under the supervision of Bureau Chief Kim Berger. The Bureau of Internet and Technology is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.