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Target Lawsuits Pile Up After Data Breach at Credit Card Terminals

Image: Target Lawsuits Pile Up After Data Breach at Credit Card Terminals

By Morgan Chilson   |   Tuesday, 24 Dec 2013 01:23 PM

The lawsuits are piling up against Target from shoppers angry over hacked credit card data, prompting the company's general counsel to speak with state prosecutors as more than two dozen lawsuits have been filed and more may be on the way.

Target announced last week that about 40 million credit/debit card numbers and data were stolen. The company is working with law enforcement to determine what happened, and has only released information saying the hack occurred from “malware that affected Target’s point-of-sale system in our U.S. stores,” CNN said.

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The lawsuits that may become class actions have been filed in several states and CNN said plaintiffs allege the company “failed to implement and maintain reasonable security procedures and practices.”

“Target has an obligation to provide adequate security for the financial information they collect,” California attorney Robert Ahdoot told CNN.

Two U.S. senators have asked the U.S. Federal Trade Commission to investigate the situation, which is the second largest breach of credit card data to occur in the United States.

“If Target failed to adequately protect customer information, it denied customers the protection that they rightly expect when a business collects their personal information,” Blumenthal said in a letter to the FTC, as quoted by CBS News. “Its conduct would be unfair and deceptive.”

The FTC had no comment on whether it would investigate.

The hack hurt Target’s consumer perception, CBS reported, indicating that the company’s Buzz score, which is figured by subtracting negative feedback from positive, went from 26 before the data theft to -19 after it.

Other companies took a few weeks to get back their positive consumer perceptions after data breaches, CBS said, citing Citibank, which took four weeks to recover, and Sony, which took eight weeks. An expert told CBS that Target is expected to take 12 weeks or longer to be seen in a more positive light by consumers.

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