CCPA Penalties: A Guide to Consequences of Non-Compliance

Gowsika

Gowsika

Jan 09, 2024

CCPA Penalties_ A Guide to Consequences of Non-Compliance

The California Consumer Privacy Act (CCPA) was passed in 2020 as a comprehensive data privacy regulation and is now one of the most stringent frameworks in the United States. Failure to adhere to CCPA guidelines can lead to substantial fines. Such penalties are like roadblocks in any organization’s growth path, as they can significantly impact the company’s revenue and reputation.

Hence, aligning with CCPA requirements is significant, but it is challenging for businesses, presenting intricate challenges in maintaining compliance. 

Understanding the framework and its penalties is crucial for companies seeking to safeguard their operations and reputation in an increasingly regulated data privacy landscape.

But what exactly constitutes a fine? And how can such penalties be circumvented? In this guide, we are covering everything you need to know about CCPA penalties.

What is a CCPA penalty?

The California Consumer Privacy Act (CCPA) incorporates penalties for any account breach or violation of its regulations, enabling legal action by consumers. Penalties include fines of up to US $ 100-750 per consumer affected or actual damages, whichever is greater. It also includes injunctive or declaratory judgments and other appropriate court remedies for violations.

Penalties are determined based on several factors, such as the nature, frequency, and severity of violations, as well as their duration, intent, and the defendants’ financial capacity.

Businesses have 30 days to perform corrective actions for any complaint that breaches the law. However, this is discretionary if the breach results in loss to a consumer.

What are the penalties under CCPA?

The California Consumer Privacy Act (CCPA) imposes hefty penalties for infractions and non-compliance with the regulations. Businesses failing to adhere to CCPA regulations may face the following penalties:

Civil penalties: The California Attorney General issues a 30-day notice for organizations, providing an opportunity to rectify non-compliance and perform corrective actions. Failure to address identified breaches of the regulations within this period can result in civil penalties of up to $2,500 per violation. This penalty applies regardless of whether the violation was accidental or intentional. Some of the most common violations include:

  • Violation of CCPA privacy policy requirements
  • Failure to inform consumers of their privacy rights
  • Failure to act on “ Do Not Sell My Personal Information ” requests
  • Inadequate notification when obtaining personal information
  • Failure to comply with consumer access or deletion requests
  • Failure to report unauthorized access or data breach
  • Selling personal information without opt-out provision
  • Discrimination against consumers exercising CCPA rights
  • Failure to get consent for child’s Data

Intentional violations: Willful infringements of the CCPA face may lead to more severe consequences. Firms found intentionally violating the CCPA may face fines of up to $7,500 per violation.

Ensuring compliance not only safeguards businesses but also respects and upholds consumers’ CCPA privacy rights. Hence, it is significant to understand and prioritize CCPA compliance to refrain from these penalties, protect consumer privacy, and maintain trust with your consumers.

Get A Real Time View Of Risk

Who is liable for CCPA penalties?

The CCPA applies to for-profit businesses that collect personal information from California residents and meet specific criteria, including:

Minimum revenue threshold: Businesses with an annual gross revenue of at least $25 million.

Data collection: Businesses that collect and maintain personal information about 50,000 or more California residents (or households) annually.

Engagement in commercial activities: Businesses that generate at least half of their annual revenue from selling Californians ‘personal information. Businesses that fit these criteria are governed by CCPA regulations and will incur penalties if they fail to comply. Entities subject to the CCPA must understand and comply with its requirements or face financial and legal risks.

Read more : 5 Best CCPA Compliance Tools

Cost of CCPA non-compliance

Understanding the costs associated with non-compliance is crucial for organizations aiming to maintain regulatory adherence and preserve customer relationships. Below, we have listed a few impacts of failing to comply with CCPA guidelines.

Cost of CCPA non-compliance

Also check: CCPA Compliance Checklist (This is All You Need)

Injunctions and Civil Sanctions: Cure period Charges of alleged violations for which there is no cure period, if they are not corrected within the set time limit will lead to injunctions and civil sanctions. An injunction could force the company to stop performing certain actions, perhaps shutting it down until CCPA compliance is achieved.

Civil Penalties for Intentional Violations: Businesses with intentional CCPA violations, which are brought by the State of California through its Attorney General’s Office, could face maximum civil penalties up to $7,500 in an individual instance. A period of 30 days in which to cure the violation is allowed, and if this cannot be done it leads to financial penalties.

Civil Penalties for Unintentional Violations: For unintentional violations, also pursued by the State of California through the Attorney General’s Office, businesses may face maximum civil penalties of $2,500. Similar to intentional violations, a 30-day cure period is granted, with financial penalties ensuing if the violation remains unresolved.

Private Lawsuits by Consumers: Consumers can initiate private lawsuits, demanding damages ranging from $100 to $750 or actual damages (whichever is higher) for each incident of a breach involving their unredacted and unencrypted data. Businesses are granted a 30-day window to address the violation upon consumer notice, failing which civil penalties apply.

Impact on Customer Relationships: Beyond legal consequences, non-compliance affects customer relationships. Informed consumers, driven by GDPR awareness and data breach incidents, consider a company’s data security practices crucial. Failure to secure personal data not only risks fines but also damages customer trust, potentially leading to customer loss and associated financial and strategic setbacks.

Maximize savings on your CCPA audit

Tips to avoid CCPA penalties

With the recent changes introduced in the CCPA framework, the requirements have become even more stringent. This makes it harder for organizations to work around the CCPA standard. Here are a few practical tips to ensure compliance and mitigate potential fines under the CCPA:

Tips to avoid CCPA penalties

Conduct a comprehensive assessment

Carefully review your business operations, covering the collection and processing of data as well as the use of third parties. This exam will help you decide which legal documents to use and how to handle users ‘requests properly.

Craft a transparent privacy policy

Establish a clear privacy policy, including all relevant data about how consumer information is collected and used. Ensure it is prominently located on your website or app’s home page, with instructions about requesting changes and CCPA inquiry contact information.

Ensure user privacy

Honour the choices of users concerning the selling or sharing of their personal information. While the CCPA doesn’t require opt-in consent, it notifies users of sale activities and provides a simple mechanism to exercise their right to refuse. Upon users’ first entry on your platform, show a conspicuous DNSMPI notice.

Prompt response to user requests

Set up effective procedures for promptly handling user requests for their personal information. For all access requests, deletion requests, or queries about data-sharing practices respond promptly and in a user-friendly way.

Stay informed and compliant

Stay updated on any changes in CCPA regulations and privacy laws. Keep your compliance strategy up to speed with legal developments, and consult with lawyers periodically about how best to protect personal data in light of changing privacy standards.

Conclusion

Meeting CCPA standards extends beyond a mere legal obligation; it stands as a crucial strategy for building trust and credibility with customers. Non-compliance can significantly impact a company’s business operations and financial stability, resulting in substantial fines, lawsuits, and reputational damage. Hence, to navigate through data privacy regulations like CCPA and mitigate the risk of penalties, leveraging automation tools such as Sprinto is essential. 

Sprinto—a smart compliance automation software, offers a comprehensive suite of tools for enabling robust data privacy practices, enabling adequate adherence to CCPA, and to elude from potential penalties. Implementing automated solutions like Sprinto empowers businesses to proactively manage consumer data, minimize the risk of breaches, and ensure continual compliance with evolving privacy laws.

FAQs

1. Which businesses should adhere to CCPA regulations?

For a business to be subject to CCPA regulations, should generate an annual gross revenue exceeding $25 million, handle the personal data of 100,000 or more California residents, households, or devices, or engage in the buying, selling, or sharing of consumer information.

2. What are the penalties for CCPA?

The penalties for CCPA non-compliance can range from severe fines to potential legal actions from consumers. Firms that are not in compliance, moreover, may be fined anything from US $2,500 to $7,500 per intentional violation.

3. What is the maximum CCPA penalty?

The highest CCPA penalty can reach up to $7,500 for each intentional violation or $2,500 for non-intentional breaches. The individual penalties are not high, but they may soar if multiplied by the number of consumers affected. Then, non-conformance can quickly become very expensive.

4. Can fines be imposed for unintentional CCPA violations?

Yes, accidental violations can be punished by fines so long as it is proved that the breach was due to negligence or failure to take adequate precautions against consumer data leaks.

Gowsika

Gowsika

Gowsika is an avid reader and storyteller who untangles the knotty world of compliance and cybersecurity with a dash of charming wit! While she’s not decoding cryptic compliance jargon, she’s oceanside, melody in ears, pondering life’s big (and small) questions. Your guide through cyber jungles, with a serene soul and a sharp pen!

Here’s what to read next….

Sprinto: Your growth superpower

Use Sprinto to centralize security compliance management – so nothing
gets in the way of your moving up and winning big.