A $6.75 million settlement with Blackbaud marks a fundamental shift in how regulators view consent management. This first major penalty targeting consent failures during a cybersecurity incident establishes critical precedents for businesses nationwide. Is your organization prepared for this new enforcement landscape?
Blackbaud, a cloud CRM provider serving thousands of nonprofits, suffered a devastating ransomware attack in 2020 that exposed donor data across 13,000 organizations. California's 2024 enforcement action highlighted three critical consent-related failures that triggered the substantial penalty:
Inadequate data encryption left sensitive donor information, including financial data, stored in unencrypted fields. This violated CCPA's requirement for "reasonable security practices" and reflects California's strict interpretation of updated regulations that now explicitly tie data security to consent integrity.
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Misleading breach disclosure significantly compounded the violation. Blackbaud initially claimed hackers didn't access financial data, while later SEC filings contradicted this assertion. This misrepresentation transformed a security incident into a consent violation under California's framework.
Outdated consent architecture further amplified the penalties. Blackbaud failed to update legacy systems handling consent preferences despite known vulnerabilities, demonstrating negligence in maintaining the infrastructure supporting consented data processing.
This landmark case establishes several precedents that will influence privacy enforcement across the country:
Regulators now view cybersecurity safeguards as inherent to valid consent management. Even with proper opt-in mechanisms, failing to protect consented data effectively voids compliance. This represents a fundamental shift in how consent is evaluated.
According to recent assessments, 87% of U.S. businesses using legacy consent systems may face similar risks under this new interpretation. The integration of security and consent represents a significant expansion of regulatory expectations.
Courts affirmed Blackbaud qualified as a CCPA-regulated "business" due to its data broker activities, specifically selling analytics derived from consented data. This expands liability for SaaS platforms beyond traditional data processors, capturing many organizations previously considering themselves exempt.
The 2020 breach was penalized under 2024's enhanced CCPA framework, signaling regulators will apply current standards to past incidents. This creates potential liability for historical security events under today's stricter interpretations.
While California led the enforcement action, 20 states participated in investigations, previewing how federal privacy laws might be enforced collaboratively. This multi-jurisdictional approach foreshadows the national impact of state-level precedents.
The Blackbaud case provides clear guidance for organizations seeking to avoid similar penalties:
California now mandates quantum-resistant encryption for all consented data fields—a standard likely to spread nationally. This elevated requirement goes beyond traditional security measures to address emerging threats specifically to consent-managed information.
Your organization should implement encryption across all systems handling consent data, with particular attention to fields containing sensitive personal or financial information. Legacy systems that cannot support modern encryption standards require immediate remediation.
The penalty specifically cites Blackbaud's failure to monitor whether security practices matched consent disclosures. Modern solutions must now:
Map consented data flows throughout your organization Automatically flag unencrypted fields containing personal data Generate comprehensive audit trails for regulators
Implementing continuous monitoring technology ensures you can detect discrepancies between consent promises and actual data handling before they become regulatory violations.
Misrepresenting breach scope (as Blackbaud did) now triggers automatic CCPA violations, regardless of initial consent validity. This merging of security incident response with consent obligations creates a higher standard for breach communications.
Your incident response plans must be updated to specifically address consent implications during security events. This includes documenting what consented data may have been compromised and providing accurate disclosures to both affected individuals and regulators.
Blackbaud's clients faced liability for relying on its flawed systems. Updated CCPA rules require more rigorous vendor management:
Annual vendor security audits with specific focus on consent systems Shared responsibility agreements that clearly define consent obligations Escrow arrangements for consent data to ensure continuity
Your procurement and vendor management processes should incorporate these requirements, with explicit contractual protections addressing consent management expectations.
California's action has already influenced three key developments reshaping the national privacy landscape:
The FTC's Updated Safeguards Rule (March 2025) mandates encryption for all customer data obtained through consent interfaces, extending California's standard to federal enforcement.
Texas TDPSA Amendments now require breach impact assessments to specifically evaluate consent integrity risks, adopting a similar perspective on the relationship between security and consent.
NIST Privacy Framework 2.1 adds consent-chain security as a core component, establishing technical standards that will influence regulatory expectations nationwide.
The bottom line is clear: consent management is no longer just about checkboxes and preference centers—it's an end-to-end security obligation. With 20+ state attorneys general adopting California's enforcement model, businesses must integrate privacy, security, and consent teams to avoid becoming the next multi-million dollar case study.
Recent data underscores this urgency: 68% of companies hit with ransomware in 2024 had outdated consent management systems according to Gartner. This correlation between security incidents and consent management deficiencies highlights the interconnected nature of modern privacy requirements.
Organizations that proactively address these new standards will not only avoid penalties but build stronger trust relationships with customers increasingly concerned about how their consented data is protected. The Blackbaud case serves as both warning and roadmap for navigating this new regulatory landscape.
