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Did They Violate Breach Disclosure Laws?

Rich September 16, 2008 No Comments

There’s been an extremely interesting, and somewhat surprising, development in the TJX case the past couple weeks. No, I’m not talking about one of the defendants pleading guilty (and winning the prisoners dilemma), but the scope of the breach. Based on the news reports and court records, it seems TJX wasn’t the only victim here. From ComputerWorld: Toey was one of 11 alleged hackers arrested last month in connection with a series of data thefts and attempted data thefts at TJX and numerous other companies. Besides TJX and BJ’s, the list of publicly identified victims of the hackers includes DSW, OfficeMax, Boston Market, Barnes and Noble, Sports Authority and Forever 21. Huh. Wacky. I don’t seem to recall seeing breach notifications from anyone other than TJX. Since I’ve been out for a few weeks, I decided to hunt a bit and learned the Wall Street Journal beat me to the punch on this story: That’s because only four of the chains clearly alerted their customers to breaches. Two others – Boston Market Corp. and Forever 21 Inc. – say they never told customers because they never confirmed data were stolen from them. The other retailers – OfficeMax Inc., Barnes and Noble Inc., and Sports Authority Inc. – wouldn’t say whether they made consumer disclosures. Computer searches of their Securities and Exchange Commission filings, Web sites, press releases and news archives turned up no evidence of such disclosures. The other companies allegedly targeted by the ring charged last week were: TJX Cos., BJ’s Wholesale Club Inc., shoe retailer DSW Inc., and restaurant chain Dave and Buster’s Inc. They each disclosed to customers they were breached shortly after the intrusions were discovered. The blanket excuse from these companies for not disclosing? “We couldn’t find any definite information that we’d been breached”. Seems to me someone has a bit of legal exposure right now. I wonder if is greater or less than the cost of notification? And don’t forget, thanks to TJX seeing absolutely no effect on their business after the breach, we can pretty effectively kill off the reputation damage argument. Share:

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