DSW: The Impact of Information Leakage

Ohio Attorney General Jim Petro has asked a court to order shoe retailer Designer Shoe Warehouse (DSW) to individually notify each customer whose personal information may have been stolen recently from DSW computer files. Ohio is the first state to sue the retailer over one of the biggest security breaches of its kind in the nation.

The incident was discovered March 8. Some customers of DSW Shoe Warehouse have been informed that data was stolen from the company's computer for 108 stores which included information on 1.4 million credit card holders and 96,000 check writers for a period from mid-November, 2004 through mid-February 2005. Criminals have got credit card, driver's license and checking account numbers.

DSW, based in Columbus with retail stores in more than 30 states, including Ohio, didn't contact each affected customer. Petro asked the court to order DSW to directly notify in writing approximately 700,000 customers affected by the security breach and to find that the company's failure to do so is a violation of the state's Consumer Sales Practices Act.

“DSW suffers from bad publicity and loses customers' trust. It will be very difficult to restore company's good name after court hearings. I think DSW will have to make something extraordinary like ChoicePoint that has have to acquire fraud-detection software maker Magnify, because of really bad publicity", — commented Denis Zenkin, the Marketing Director of InfoWatch company.

Source: ConsumerAffairs.com

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