AfterDawn: Tech news

Banks will be allowed to sue retailers that are negligent with their data security

Written by Andre Yoskowitz (Google+) @ 06 Dec 2014 21:31 User comments (8)

Banks will be allowed to sue retailers that are negligent with their data security 2014 has undoubtedly been a year to forget for retailers and customer data, as many prominent companies have seen severe security breaches leading to the loss of names, addresses, credit card numbers and other sensitive information of hundreds of millions of Americans.
The related fraudulent charges and the costs to replace credit and debit cards has led banks to lose over $400 million on just one single scandal this year (Target), and thanks to a early court ruling, the banks can now move forward with lawsuits against retailers that have been negligent with their security.

In the Target incident, nearly 50 million cards were compromised and in the past the banks have borne the costs of replacements but until this year, the breaches have never been so large. The new ruling allows banks to sue the merchants if there is enough evidence to prove that the company was "negligent" in securing their networks and customer data.

In the case of Target, a number of banks sued claiming that Target "ignored security software alerts and disabled some of its security features" before they were attacked, and the judge agreed.

"Plaintiffs have plausibly alleged that Target's actions and inactions -- disabling certain security features and failing to heed the warning signs as hackers' attack began -- caused foreseeable harm to plaintiffs," Judge Magnuson wrote in his ruling. "Plaintiffs have also plausibly alleged that Target's conduct both caused and exacerbated the harm they suffered."

Before the cyber attack, Target had installed state-of-the-art $1.6 million advanced breach detection software from FireEye but allegedly ignored numerous warnings from the technology until it was much too late.

Source:
NYT

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8 user comments

16.12.2014 22:29

This is a good move. Retailers have been too slack with storing customers data and then getting compromised.
Yet it's us, the consumer, and the bank and the credit card companies that have to bear a lot of the costs and inconvenience due to the retailers slackness.
It's about time that whoever is at fault due to negligence (merchants) is made to pay and be accountable. If the consequences are greater, they are more likely to protect our data properly!
And this should also be extended to the many dot com companies that have had data breaches too.

27.12.2014 2:56

Banks have been hacked as well & accounts emptied


37.12.2014 3:41

Well with banks, most of the time it's not actually hacking, it's criminals tricking customers into disclosing their login details, phishing, etc - that's not the banks fault.
Retailers get compromised far, far more than banks ever have.

But the same rules should apply to banks. If it is due to negligence, then they should be punished too. But I think you will find far fewer banks are negligent, compared to retailers.
Banks take security extremely seriously, it's part of their core business. For many retailers, security is an afterthought or a distraction.

This message has been edited since its posting. Latest edit was made on 07 Dec 2014 @ 3:42

47.12.2014 16:36

To me it seams that the big dogs try to bite the small dogs.

All are responsible equally for any security breaches of Data from customers. But in special the Credit Cards Corps., that make money out of air, and which most of them are owned by the Scamers/Crocks Banksters.


Live Free or Die.
The rule above all the rules is: Survive !
Capitalism: Funnel most of the $$$ to the already rich.

57.12.2014 16:44

.

This message has been edited since its posting. Latest edit was made on 07 Dec 2014 @ 16:45

Live Free or Die.
The rule above all the rules is: Survive !
Capitalism: Funnel most of the $$$ to the already rich.

67.12.2014 19:00

Originally posted by ChikaraNZ:
Well with banks, most of the time it's not actually hacking, it's criminals tricking customers into disclosing their login details, phishing, etc - that's not the banks fault.
Retailers get compromised far, far more than banks ever have.

But the same rules should apply to banks. If it is due to negligence, then they should be punished too. But I think you will find far fewer banks are negligent, compared to retailers.
Banks take security extremely seriously, it's part of their core business. For many retailers, security is an afterthought or a distraction.
would've been more prudent to web search before answering to see if banks had been hacked yes ?,hope your not a customer of bank of america & that's just one of many who have had security bypassed..lol




78.12.2014 15:15

Originally posted by scorpNZ:
Banks have been hacked as well & accounts emptied
Rarely and you're a PUTZ for mentioning this!

Might as well say that "nothing is perfect" so...."why do anything at all".

This is a GREAT MOVE and you should PIPE DOWN with your propaganda!

88.12.2014 18:41

I guess i'm in good company then

Originally posted by hearme0:
Originally posted by scorpNZ:
Banks have been hacked as well & accounts emptied
Rarely and you're a PUTZ for mentioning this!

I guess i'm in good company then,welcome aboard


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