According to a settlement, discount shoe retailer Designer Shoe Warehouse, which discovered in March that information on 1.5 million customers had been stolen, will put in place a comprehensive security program and have its systems audited by independent experts every other year for 20 years. Thus expenses due to data theft increases from $6.5M to $9.5M.
DSW company has agreed to do more to keep identity thieves at bay, the Federal Trade Commission reported . In a settlement, the Columbus-based company will put in place a comprehensive security program and have its systems audited by independent experts every other year for 20 years.
In March, DSW found that credit, debit and checking account numbers of customers in 25 states had been stolen by hackers breaking into the company's database. The victims in the DSW case included the FTC's chairwoman, Deborah Platt Majoras, who received a warning letter from the retailer in June.
In its complaint, the FTC charged that DSW unnecessarily held on to sensitive customer data it no longer needed and stored the information in multiple files, increasing the risks to consumers. Regulators also said the company failed to use adequate or readily available security measures to limit access to its computer networks and to detect break-ins.
Some DSW customers have reported fraudulent charges to their accounts, and others with checking accounts have asked the company to pay the cost of closing accounts and ordering new checks. DSW has been reimbursing some of those expenses.
DSW noted that when the theft was discovered, it took immediate steps to notify customers and put in measures to prevent future thefts. The company said its exposure for losses related to the breach ranged from $6.5 million to $9.5 million.
Р’В«Private data leakages can cause long-term expenses. We saw how ChoicePoint's charges doubled in the second financial quarter and reached $11.4M. Now we see the same picture: DSW will spend $3M more due to data theft. These cases highlight how it is important to provide internal information security beforehandР’В», — commented Denis Zenkin, the Marketing Director of InfoWatch company.
Source: Los Angeles Times
