Archive for category Breaches

Data breach exposes 469 Social Security numbers

Social Security numbers for up to 469 people and information about thousands of concealed weapons holders were exposed in a data breach at Florida the Department of Agriculture and Consumer Services. The breach, which the agency believes happened about two weeks ago, occurred in an online payments system, spokesperson Jenn Meale said Monday.

Related News/Archive

  • Airlines expect to cancel thousands of flights due to storm, including in Tampa Bay

    2 Months Ago

  • Record number of Floridians traveling for Memorial Day

    5 Days Ago

  • Social media offers savage new United Airlines mottos

    1 Month Ago

“We were able to identify it quickly and shut the system down,” Meale said in an interview. FDACS discovered the breach within 24 hours of it occurring.

Additionally, the attacker may have obtained 16,190 names of people with concealed weapons licenses, some of which had the accompanying license number. Meale noted that no financial information was compromised.

The information came from an online payment system where users could input their Federal Employer Identification Number. Before 2009, users had the option to enter either their Social Security number or their FEIN. Some continued to enter their Social Security number after 2009, which were then affected by the breach. The count may be slightly lower than 469 Social Security numbers, however, as some may have been FEINs.

In a release, the Meale said the agency believes the attack came from overseas, but would not elaborate nor say how the attacker may have gained access to the system.

“The department takes cybersecurity seriously and acted quickly to mitigate the effects of this breach. The privacy of the department’s customers is a top priority and will remain so,” the release said.

Those affected by the breach were notified, and the 469 people whose Social Security numbers may have been compromised were offered credit monitoring and fraud alert for one year. Anyone who may have been affected can call (800) 350-1119 for further information.

Article source: http://www.tampabay.com/news/business/corporate/data-breach-exposes-469-social-security-numbers/2324802

,

No Comments

Standing Hurdles Continue To Bedevil Data Breach Plaintiffs

Terms Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you
are granted a non-exclusive, revocable license to access the Website under its
terms and conditions of use. Your use of the Website constitutes your agreement
to the following terms and conditions of use. Mondaq Ltd may terminate your use
of the Website if you are in breach of these terms and conditions or if Mondaq
Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to
read the full text of the content and articles available (the Content). You may
not modify, publish, transmit, transfer or sell, reproduce, create derivative
works from, distribute, perform, link, display, or in any way exploit any of the
Content, in whole or in part, except as expressly permitted in these terms
conditions or with the prior written consent of Mondaq Ltd. You may not use
electronic or other means to extract details or information about Mondaq.coms
content, users or contributors in order to offer them any services or products
which compete directly or indirectly with Mondaq Ltds services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the
suitability of the information contained in the documents and related graphics
published on this server for any purpose. All such documents and related
graphics are provided “as is” without warranty of any kind. Mondaq Ltd and/or
its respective suppliers hereby disclaim all warranties and conditions with
regard to this information, including all implied warranties and conditions of
merchantability, fitness for a particular purpose, title and non-infringement.
In no event shall Mondaq Ltd and/or its respective suppliers be liable for any
special, indirect or consequential damages or any damages whatsoever resulting
from loss of use, data or profits, whether in an action of contract, negligence
or other tortious action, arising out of or in connection with the use or
performance of information available from this server.

The documents and related graphics published on this server could include
technical inaccuracies or typographical errors. Changes are periodically added
to the information herein. Mondaq Ltd and/or its respective suppliers may make
improvements and/or changes in the product(s) and/or the program(s) described
herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally
identifies you, including what sort of information you are interested in, for
three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a
    colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide
    information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third
parties other than information providers. The reason we provide our information
providers with this information is so that they can measure the response their
articles are receiving and provide you with information about their products and
services.

If you do not want us to provide your name and email address you may opt out
by clicking here .

If you do not wish to receive any future announcements of products and
services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to
view the free information on the site. We also collect information from our
users at several different points on the websites: this is so that we can
customise the sites according to individual usage, provide ‘session-aware’
functionality, and ensure that content is acquired and developed appropriately.
This gives us an overall picture of our user profiles, which in turn shows to
our Editorial Contributors the type of person they are reaching by posting
articles on Mondaq (and its affiliate sites) meaning more free content for
registered users.

We are only able to provide the material on the Mondaq (and its affiliate
sites) site free to site visitors because we can pass on information about the
pages that users are viewing and the personal information users provide to us
(e.g. email addresses) to reputable contributing firms such as law firms who
author those pages. We do not sell or rent information to anyone else other than
the authors of those pages, who may change from time to time. Should you wish us
not to disclose your details to any of these parties, please tick the box above
or tick the box marked “Opt out of Registration Information Disclosure” on the
Your Profile page. We and our author organisations may only contact you via
email or other means if you allow us to do so. Users can opt out of contact when
they register on the site, or send an email to [email protected] with no
disclosure in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate
registration form. This is a personalised service where users choose regions and
topics of interest and we send it only to those users who have requested it.
Users can stop receiving these Alerts by going to the Mondaq News Alerts page
and deselecting all interest areas. In the same way users can amend their
personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a users hard drive that contains an
identifying user number. The cookies do not contain any personal information
about users. We use the cookie so users do not have to log in every time they
use the service and the cookie will automatically expire if you do not visit the
Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to
personalise a user’s experience of the site (for example to show information
specific to a user’s region). As the Mondaq sites are fully personalised and
cookies are essential to its core technology the site will function
unpredictably with browsers that do not support cookies – or where cookies are
disabled (in these circumstances we advise you to attempt to locate the
information you require elsewhere on the web). However if you are concerned
about the presence of a Mondaq cookie on your machine you can also choose to
expire the cookie immediately (remove it) by selecting the ‘Log Off’ menu option
as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example,
advertisers). However, we have no access to or control over these cookies and we
are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement,
and gather broad demographic information for aggregate use. IP addresses are not
linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or
its affiliate sites) are not responsible for the privacy practices of such other
sites. We encourage our users to be aware when they leave our site and to read
the privacy statements of these third party sites. This privacy statement
applies solely to information collected by this Web site.

Surveys Contests

From time-to-time our site requests information from users via surveys or
contests. Participation in these surveys or contests is completely voluntary and
the user therefore has a choice whether or not to disclose any information
requested. Information requested may include contact information (such as name
and delivery address), and demographic information (such as postcode, age
level). Contact information will be used to notify the winners and award prizes.
Survey information will be used for purposes of monitoring or improving the
functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our
site, we ask them for the friends name and email address. Mondaq stores this
information and may contact the friend to invite them to register with Mondaq,
but they will not be contacted more than once. The friend may contact Mondaq to
request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users
information. When users submit sensitive information via the website, your
information is protected using firewalls and other security technology. If you
have any questions about the security at our website, you can send an email to
[email protected]

Correcting/Updating Personal Information

If a users personally identifiable information changes (such as postcode),
or if a user no longer desires our service, we will endeavour to provide a way
to correct, update or remove that users personal data provided to us. This can
usually be done at the Your Profile page or by sending an email to [email protected]

Notification of Changes

If we decide to change our Terms Conditions or Privacy Policy, we will
post those changes on our site so our users are always aware of what information
we collect, how we use it, and under what circumstances, if any, we disclose it.
If at any point we decide to use personally identifiable information in a manner
different from that stated at the time it was collected, we will notify users by
way of an email. Users will have a choice as to whether or not we use their
information in this different manner. We will use information in accordance with
the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at [email protected]

If for some reason you believe Mondaq Ltd. has not adhered to these
principles, please notify us by e-mail at [email protected] and we will use
commercially reasonable efforts to determine and correct the problem promptly.

Article source: http://www.mondaq.com/unitedstates/x/596124/data+protection/Standing+Hurdles+Continue+To+Bedevil+Data+Breach+Plaintiffs

,

No Comments

Data Breach at Restaurant Search Service Exposes 17 Million User Accounts

SHARE




 





 










 





 

The restaurant search and discovery service Zomato, which boasts more than 120 million users per month, recently announced that its security team discovered that approximately 17 million user IDs, names, user names, email addresses and hashed passwords were stolen from its database.

“We hash passwords with a one-way hashing algorithm, with multiple hashing iterations and individual salt per password,” the company stated. “This means your password cannot be easily converted back to plain text. We however strongly advise you to change your pasword for any other services where you are using the same password.”

All affected users’ passwords have been reset, and the company says all payment information is stored in a separate database that wasn’t impacted by the breach.

In an update, Zomato stated that hacker, who had put the user data up for sale, had agreed to destroy all copies of the stolen data and take it off the market. “The marketplace link which was being used to sell the data on the dark Web is no longer available,” the company said.

The hacker wanted the company to acknowledge its security vulnerabilities and launch a bug bounty program — and Zomato says it’s planning to introduce a bug bounty program on HackerOne “very soon.”

The hacker also provided detailed information on how the database was accessed, which the company says it will make publicly available once all loopholes are closed, “so that others can learn from our mistakes.”

“Having said that, we are going to be cautious and paranoid, as this is a sensitive matter,” the company added. “6.6 million users had password hashed in the ‘leaked’ data, which can be theoretically decrypted using brute force algorithms. We will be reaching out to these users to get them to update their password on all services where they might have used the same password.”

Brand Impact of a Breach

According to a recent Ponemon Institute study on the brand impact of a data breach, breached companies’ stock value declined by an average of five percent on the day a data breach was disclosed, and experienced up to a seven percent customer churn.

The survey, sponsored by Centrify, also found that 31 percent of consumers impacted by a data breach said they had discontinued their relationship with the breached organization, and 65 percent said they had lost trust in that organization.

Still, 45 percent of IT practitioners surveyed don’t believe brand protection is taken seriously in the C-suite.

While 80 percent of consumers surveyed said organizations have an obligation to take reasonable steps to secure their personal information, just 65 percent of CMOs and 64 percent of IT professionals agree.

Similarly, while 70 percent of consumers think organizations have an obligation to control access to their information, less than half of CMOs and IT security practitioners agree.

Fifty-six percent of IT practitioners aren’t confident they have the ability to prevent, detect, and resolve the consequences of a data breach, and more than half worry that a data breach would cost them their job.

Centrify CEO Tom Kemp said in a statement that the findings should serve as a wakeup call to every organization that security isn’t just about protecting data — it’s about protecting the business.

“It is no longer just an IT problem — it must be elevated to the C-suite and boardroom because it requires a holistic and strategic approach to protecting the whole organization,” Kemp said.

Article source: http://www.esecurityplanet.com/threats/data-breach-at-restaurant-search-service-exposes-17-million-user-accounts.html

,

No Comments

Lone consumer holds up Target data breach settlement

Target has paid banks and credit- and debit-card issuers about $110 million for fraud losses, card replacement costs and other damages they endured.

In late 2015, Target agreed to a compensation plan for affected consumers with a pool of $10 million available. But consumers have yet to see a dime because of a sole objection.

One man stands in the way.

Leif Olson, a Texas resident, has been able to block court approval of the plan. He’s represented by a group critical of lawyers called the Center for Class Action Fairness.

The group’s opposition makes no sense, said attorney Vincent Esades, who represented consumers in a data breach class-action lawsuit against Target.

“They’re saying there should have been more classes. More lawyers. Their ultimate conclusion is this case should not be going forward as a class action,” he said. “I disagree because if it doesn’t go forward as a class action, hundreds of thousands of people are not going to get anything.” Only about 226,000 consumers filed for compensation from Target. They had to provide evidence of a loss or, if they lacked documentation, assert they suffered certain kinds of trouble, such as having to dispute fraudulent charges or overdraft fees.

Individual pay-outs are capped at $10,000. But the vast majority of claims are undocumented and would pay only $40.

The Center for Class Action Fairness, which is associated with the Competitive Enterprise Institute, a libertarian think tank. The center boasts that when it prevails “lawyers get less, class members get more.”

Melissa Holyoak, an attorney with the Center, contends consumers did not get a good deal in the Target case. They’re in line for just $10 million, while attorney and administration costs hit $13 million.

She said various groups of consumers would get a raw deal. For example, she said there’s nothing in the settlement to compensate for damages only incurred in the future.

“If you had some sort of loss that you could identify, you could get money under the settlement. But everyone else got nothing,” Holyoak said.

After U.S. District Court Judge Paul Magnuson approved the proposed settlement, the center appealed. In February, the 8th U.S. Circuit Court of Appeals sent the case back to Magnuson for reconsideration.

Attorneys who negotiated the class-action settlement with Target argue it offers something for everyone — specifically, enhanced security and business practices Target agreed to implement to prevent future fiascoes.

But Holyoak said those terms don’t specifically benefit injured consumers.

“That is for everyone. The whole world gets the protections that Target is now doing,” she said. “It doesn’t offer any special consideration for these class members.”

Class-action objectors are allowed to hold up settlements, but the motives can range from personal gain to calling attention to legitimate shortcomings.

Critics of the Center for Class Action Fairness say it masquerades as a consumer advocate, but really tries to undermine class actions.

“It’s part of constellation of conservative efforts to shut down class actions, to block people from being able to pursue justice against corporate bad actors or to enforce civil rights legislation in the courts,” said Rebecca Buckwalter-Poza, a fellow at the left-leaning Center for American Progress.

But Holyoak said her organization is about preventing attorneys from siphoning off money that should rightly go to the consumers in a class action settlement.

“We want them to be fair. We’re not trying to get rid of class actions,” Holyoak said. “We just want to get rid of the bad players in class action. The ones that are only structuring and negotiating selfish settlements.”

Judge Magnuson recently reaffirmed his prior decision. But further reviews and appeals are possible.

That could mean nothing gets resolved and consumers won’t get paid before next year, at the earliest, even though Magnuson ruling indicates he doesn’t see a better option.

It is “difficult to imagine a settlement that more comprehensively addresses all of the harm suffered,” he wrote.

Article source: http://www.inforum.com/business/4269956-lone-consumer-holds-target-data-breach-settlement

,

No Comments

IT Professionals Don’t Recognize Brand Impact From Data Breaches

‘Public Relations’: Now More Than Ever

Paul Holmes

In jettisoning the term “public relations,” practitioners are turning their backs on the one thing t …

,

No Comments

Class-action suit filed alleging Chipotle’s ‘elementary’ security …

DENVER – Chipotle faces a class-action lawsuit for the potential data breach the company first reported last month, alleging the company’s willful negligence and “elementary” security measures led to the breach and is now costing banks and customers money.

The Denver-based company first reported the possible breach late last month, saying that credit and debit cards used between March 24 and April 18 of this year may have been compromised by “unauthorized activity” on company servers.

“Consistent with good practices, consumer should closely monitor their payment card statements. If anyone sees an unauthorized charge, they should immediately notify the bank that issued the card,” the company said in its statement. “Payment card network rules generally state that cardholders are not responsible for such charges.”

And that statement is exactly what the lawsuit filed May 4 in the U.S. District Court of Colorado claims is the basis for the suit.

The suit’s class has yet to be certified, but it was filed by New Hampshire-based Bellwether Community Credit Union on the behalf of all “credit unions, banks, and other financial institutions” they may have had to reissue customers’ cards that were compromised in the breach, close compromised accounts, or remedy any false transactions.

The suit claims that there are more than 100 members of the proposed class, and that alleged damages exceed $5 million.

Though it’s still unclear how many customers may have been affected in the alleged breach, the suit claims that the company knew it was putting itself at risk for further security breaches after a 2004 breach and a handful of recent ones involving other food-service companies.

“The deficiencies in Chipotle’s security system include a lack of elementary security measures, which even the most inexperienced IT professional could identify as problematic,” the suit says.

It claims that the company, which had around 2,250 U.S. locations as of March 31, failed to upgrade its security after a breach the company says cost it about $4.3 million between 2004 and 2006.

The suit also cites Chipotle’s February 2017 annual report to the U.S. Securities and Exchange Commission (SEC), in which the company itself said:

“We may in the future become subject to additional claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we may also be subject to lawsuits or other proceedings in the future relating to these types of incidents … Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.

“The liabilities resulting from any of the foregoing would likely be far greater than the losses we recorded in connection with the data breach incident in 2004.”

The suit claims that one of the biggest problems that led to the hacking was Chipotle’s failure to adhere to credit card companies’ regulations that required companies to start using chip technology by October 2015.

The chips mask information contained within transactions about credit card information, unlike the former magnetic strip cards.

But the suit claims that Chipotle stated specifically that it would not switch over to the chip-only system because it would “slow down customer lines.”

By doing so, the company opened itself up to face damages from litigation, as per the regulations set forth by the card companies that said that any business not adhering to the October 2015 deadline would “agree to be liable for damages resulting from any data breaches,” according to the lawsuit.

The suit says that Chipotle has said that 70 percent of its sales involved a debit or credit card transaction, and estimates that “hundreds of thousands” of Chipotle customers could have had their private credit and debit card numbers, and information relating to them, compromised.

Since the burden is on banks to close accounts and reissue new cards, the suit claims that any bank having to do so because of the Chipotle breach is damaged by the breach and subject to compensation.

The class, should it be certified, requests damages and injunctive and declaratory relief on the basis that Chipotle was negligent in its failure to upgrade its security systems for transactions and data storage.

It asks a judge to issue an injunction forcing Chipotle to adhere to industry-standard encryption methods, switch to chip-card readers, and undergo a large audit and subsequent upgrade of its security systems.

A request for comment made to Chipotle had not been returned as of the time of publishing.

A scheduling conference for the case has been set for July 18 in Denver.

Article source: http://www.thedenverchannel.com/news/crime/class-action-suit-filed-alleging-chipotles-elementary-security-negligence-led-to-data-breach

,

No Comments

2017’s biggest hacks, leaks, and data breaches — so far

Security

No TPM (Trusted Platform Module) in your PC? No problem, here’s how to fit one

Article source: http://www.zdnet.com/pictures/biggest-hacks-leaks-and-data-breaches-2017/

,

No Comments

Retail giant hit by year-long credit card data breach

Swiping your credit or debit card at a retail store can be risky. That’s because criminals are always looking for companies with lax security so they can rip us off.

When we use these cards to make payments, we expect the retail location to have a secure system. Unfortunately, it’s not always the case. We’re now learning about a massive data breach that took the impacted company almost a year to discover, putting countless customers’ finances in jeopardy.

Has your banking information been compromised?

We’re talking about the country’s oldest clothing retailer, Brooks Brothers. The company just disclosed that it was the victim of a major data breach that was ongoing from April 4, 2016 until March 1, 2017. A criminal installed malicious software designed to capture payment card information on some of the company’s payment processing systems.

Anyone who shopped at Brooks Brothers during that time-frame could be impacted. Stolen information consists of payment card data – including name, payment card account number, card expiration date and card verification code.

Here is the notice of the data breach Brooks Brothers sent to its customers:

“Brooks Brothers recently became aware of a security incident that could affect the payment card information of some customers who made purchases at certain Brooks Brothers and Brooks Brothers outlet retail locations in the U.S. and Puerto Rico only between April 4, 2016 and March 1, 2017. It is important to note that no sensitive personal information, such as Social Security number or personally identifying information was affected in this incident.

“As a precaution, we are providing this notice to make potentially affected customers aware of the incident and provide information on steps they can take to help protect themselves. We take the security of our customers’ information very seriously and value the trust you place in us to protect your information. We deeply regret any inconvenience or concern this may cause you.”

Over 220 locations across the country were affected by the breach. The company has set up a webpage with a searchable database that allows you to check which locations are impacted. Click here to see the list of affected locations, just select the State/Territory from the drop-down box and it will show all affected locations in that region.

Brooks Brothers is assuring customers that the data breach has been taken care of and it’s now safe to shop there. Transactions on the company’s website were not part of the breach.

The company is urging customers to look at their bank statements dating back to April 2016 to check for suspicious activity. If you find any transactions that you don’t recognize you should report them to your bank immediately.

What you need to do after a data breach

  • Keep an eye on your bank accounts You should already be frequently checking your bank statements, looking for suspicious activity. It’s even more critical when credit card data has been exposed through a data breach. If you see anything that seems strange, report it immediately.
  • Set up two-factor authentication  Two-factor authentication, also known as two-step verification, means that to log into your account, you need two ways to prove you are who you say you are. It’s like the DMV or bank asking for two forms of ID. Click here to learn how to set up two-factor authentication.
  • Investigate your email address  Have I Been Pwned is an easy-to-use site with a database of information that hackers and malicious programs have released publicly. It monitors hacker sites and collects new data every five to 10 minutes about the latest hacks and exposures.
  • Change your password – Whenever you hear news of a data breach, it’s a good idea to change your account passwords. Read this article to help you create hack-proof passwords.
  • Close unused accountsHere’s an easy way to manage all of your online accounts at once.
  • Beware of phishing scams – Scammers will try and piggyback on data breaches like this. They will create phishing emails, pretending to be from the affected company, hoping to get victims to click on malicious links that could lead to more problems. Take our phishing IQ test to see if you can spot a fake email.
  • Manage passwords – Many people use the same username and password on multiple sites. This is a terrible practice and you should never do it. If you’re using the same credentials on multiple sites, change them to make them unique. If you have too many accounts to remember, you could always use a password manager.

More stories you can’t miss:

5 password mistakes that will likely get you hacked

Do hackers really have millions of usernames and passwords? And should I be worried?

Another NSA cyber weapon stolen by hackers! Widespread damage expected

Article source: http://www.komando.com/happening-now/401043/retail-giant-hit-by-year-long-credit-card-data-breach

,

No Comments

2017’s biggest hacks, leaks, and data breaches — so far

Security

No TPM (Trusted Platform Module) in your PC? No problem, here’s how to fit one

Article source: http://www.zdnet.com/pictures/biggest-hacks-leaks-and-data-breaches-2017/

,

No Comments

Class-action suit filed alleging Chipotle’s ‘elementary’ security, negligence led to data breach

DENVER – Chipotle faces a class-action lawsuit for the potential data breach the company first reported last month, alleging the company’s willful negligence and “elementary” security measures led to the breach and is now costing banks and customers money.

The Denver-based company first reported the possible breach late last month, saying that credit and debit cards used between March 24 and April 18 of this year may have been compromised by “unauthorized activity” on company servers.

“Consistent with good practices, consumer should closely monitor their payment card statements. If anyone sees an unauthorized charge, they should immediately notify the bank that issued the card,” the company said in its statement. “Payment card network rules generally state that cardholders are not responsible for such charges.”

And that statement is exactly what the lawsuit filed May 4 in the U.S. District Court of Colorado claims is the basis for the suit.

The suit’s class has yet to be certified, but it was filed by New Hampshire-based Bellwether Community Credit Union on the behalf of all “credit unions, banks, and other financial institutions” they may have had to reissue customers’ cards that were compromised in the breach, close compromised accounts, or remedy any false transactions.

The suit claims that there are more than 100 members of the proposed class, and that alleged damages exceed $5 million.

Though it’s still unclear how many customers may have been affected in the alleged breach, the suit claims that the company knew it was putting itself at risk for further security breaches after a 2004 breach and a handful of recent ones involving other food-service companies.

“The deficiencies in Chipotle’s security system include a lack of elementary security measures, which even the most inexperienced IT professional could identify as problematic,” the suit says.

It claims that the company, which had around 2,250 U.S. locations as of March 31, failed to upgrade its security after a breach the company says cost it about $4.3 million between 2004 and 2006.

The suit also cites Chipotle’s February 2017 annual report to the U.S. Securities and Exchange Commission (SEC), in which the company itself said:

“We may in the future become subject to additional claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information, and we may also be subject to lawsuits or other proceedings in the future relating to these types of incidents … Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.

“The liabilities resulting from any of the foregoing would likely be far greater than the losses we recorded in connection with the data breach incident in 2004.”

The suit claims that one of the biggest problems that led to the hacking was Chipotle’s failure to adhere to credit card companies’ regulations that required companies to start using chip technology by October 2015.

The chips mask information contained within transactions about credit card information, unlike the former magnetic strip cards.

But the suit claims that Chipotle stated specifically that it would not switch over to the chip-only system because it would “slow down customer lines.”

By doing so, the company opened itself up to face damages from litigation, as per the regulations set forth by the card companies that said that any business not adhering to the October 2015 deadline would “agree to be liable for damages resulting from any data breaches,” according to the lawsuit.

The suit says that Chipotle has said that 70 percent of its sales involved a debit or credit card transaction, and estimates that “hundreds of thousands” of Chipotle customers could have had their private credit and debit card numbers, and information relating to them, compromised.

Since the burden is on banks to close accounts and reissue new cards, the suit claims that any bank having to do so because of the Chipotle breach is damaged by the breach and subject to compensation.

The class, should it be certified, requests damages and injunctive and declaratory relief on the basis that Chipotle was negligent in its failure to upgrade its security systems for transactions and data storage.

It asks a judge to issue an injunction forcing Chipotle to adhere to industry-standard encryption methods, switch to chip-card readers, and undergo a large audit and subsequent upgrade of its security systems.

A request for comment made to Chipotle had not been returned as of the time of publishing.

A scheduling conference for the case has been set for July 18 in Denver.

Article source: http://www.thedenverchannel.com/news/crime/class-action-suit-filed-alleging-chipotles-elementary-security-negligence-led-to-data-breach

,

No Comments