New Hagens Berman Lawsuit: Target Was Informed of Data Vulnerability in 2007, but Ignored Danger

  New Hagens Berman Lawsuit: Target Was Informed of Data Vulnerability in
  2007, but Ignored Danger

Business Wire

SEATTLE -- January 14, 2014

Today consumers represented by law firm Hagens Berman Sobol Shapiro LLP filed
a proposed class-action lawsuit against Target (NYSE: TGT) claiming the retail
giant ignored warnings from as early as 2007 that the company’s point-of-sale
(POS) system was vulnerable to attack, a move that put millions of Americans’
credit-cards and personal information at risk after the system was penetrated
by unknown attackers on or about Nov. 17, 2013.

The lawsuit, filed by consumer-rights law firm Hagens Berman in the U.S.
District Court for the Northern District of California, claims that security
expert Dr. Neal Krawetz alerted Target and other major national retail chains
about its vulnerability to attack in a white paper outlining POS
vulnerabilities at major retailers. The paper warned that security
shortcomings in POS systems could put the financial information of consumers
at risk. The white paper used Target as a specific example of the potential
impact, estimating that as many as 58 million consumers could be at risk of
account theft unless the retailer took steps to fix the issues.

The complaint alleges that a Target developer responsible for the retailer’s
POS system was sent the white paper, acknowledged receiving it, and requested
permission to send it to other Target employees. Attorneys claim that the
developer also described Dr. Krawetz’s suggestions as “good ideas.” However,
the lawsuit claims, Target ultimately failed to implement Dr. Krawetz’s
proposed security fixes, and thus remained vulnerable to the attack that
followed several years later.

“We believe that Target not only knew its systems were vulnerable to exactly
this kind of attack all the way back in 2007, but was alerted to and
acknowledged suggestions that would have made its customers safer,” said Tom
Loeser, a Hagens Berman Partner and former federal prosecutor in the Cyber and
Intellectual Property Crimes Section of the U.S. Attorneys’ Office in Los
Angeles. “However, Target did not act on this knowledge, and as a result, tens
of millions have had their personal information stolen and financial accounts
compromised.”

The lawsuit also claims that Target was likely not compliant with industry
standards for security, such as the PCI Data Security Standard (“PCI DSS”).
For instance, the suit quotes an analyst who notes that three-digit CVV codes
must have been stored in order for them to have been stolen, but storing CVV
codes is a practice long banned by the PCI.

Attorneys allege that in addition to negligence prior to the security breach,
Target repeatedly misled its customers about the nature and scale of the
breach. For instance, the suit claims that Target initially stated that
customers’ PIN numbers were not compromised, but later disclosed that the data
had, in fact, been taken. Attorneys also claim that Target initially estimated
only 40 million accounts were affected, but later appeared to state that in
addition to account information for 40 million charge cards, the personal
information of 70 million customers was also compromised. Customers whose
charge account information was compromised, and whose personal information,
such as name, address, phone number, and email were also stolen, are at a
heightened risk of identity theft, according to attorneys.

The lawsuit is a proposed class action, and seeks to represent a class of all
persons in the United States who used a credit or debit card at a Target store
and whose financial or personal information was compromised. It claims that
Target’s actions were negligent and additionally violated a number of state
laws governing unfair business practices and the disclosure of security
breaches.

“Following the data breach, Target acted consistently in its own self-interest
and was not looking out for its affected customers,” said Hagens Berman
Managing Partner Steve Berman. “It did not disclose the data breach until a
day after a private security blogger had discovered it, and even then it
sought to minimize the effect the data breach would have on its holiday sales
by disclosing the breach only on its corporate website and not disclosing that
customer PIN numbers had also been stolen.”

“The company should have immediately offered credit monitoring and/or identity
theft protection for its customers and fully disclosed the potential risks,”
Mr. Berman continued. “Instead, Target instructed its customers to ‘remain
vigilant for incidents of fraud and identity theft by regularly reviewing your
account statements and monitoring free credit reports.’”

“It is our hope,” said Mr. Berman, “that this lawsuit will cause Target and
other major retail chains that handle the personal and financial information
of millions of Americans to take data theft seriously and continuously improve
their security to meet the increasing threat from data breach attacks. Target
chose to save millions by not implementing adequate data protection protocols,
and we believe those savings should be used to compensate Target customers for
the costs, frustration, and countless hours of lost productivity that
resulted.”

Concerned consumers who made purchases at Target stores between Nov. 27, 2013,
and Dec. 15, 2013 are encouraged to contact a Hagens Berman attorney by
emailing Target@hbsslaw.com or calling (206) 623-7292.

Additional information about the investigation is available at
http://www.hbsslaw.com/cases-and-investigations/cases/Target-Data-Breach.

About Hagens Berman

Hagens Berman Sobol Shapiro, LLP, is a consumer-rights class-action law firm
with offices nine cities. The firm has been named to the National Law
Journal’s Plaintiffs’ Hot List seven times. More about the law firm and its
successes can be found at www.hbsslaw.com. The firm’s class-action law blog is
located at www.classactionlawtoday.com.

Contact:

Firmani + Associates
Mark Firmani, 206-443-9357
Mark@firmani.com
 
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