Not long after Neiman Marcus announced that it had an undisclosed amount of payment cards possibly stolen in a data breach, a class-action complaint was filed against the major retailer in the Eastern District of New York on Jan. 13, reported SC Magazine.
Neiman Marcus is facing a complaint that alleges an excess of $5 million in damages from the data breach incident. The complaint seeks equitable relief for every individual who was affected by the breach, with Melissa Frank named the lead plaintiff. Frank believes that fraudulent charges were made on her debit card after she used her card at a Neiman Marcus store, reported SC Magazine.
“[Neiman Marcus] failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the data breach,” the complaint stated.
Brian Krebs, a cybersecurity journalist, broke the data breach story on Jan. 10 and the complaint was filed only three days later by Frank. According to SC Magazine, the complaint stated that the affected consumers were likely targeted between Dec. 15, 2013, and Jan. 1, 2014.
Neiman Marcus still working out customer issues
Follow-up inquiries were made by SC Magazine to Ginger Reeder, vice president of corporate communications at Neiman Marcus, but she told the technology magazine that there was no new information to provide about the data breach or the class-action complaint.
“We informed federal law enforcement agencies and are working actively with the U.S. Secret Service, the payment brands, our merchant processor, a leading investigations, intelligence, and risk management firm, and a leading forensics firm to investigate the situation,” according to the Neiman Marcus statement released, reported SC Magazine.
Small businesses are also affected
Small businesses are seeing multiple issues with one of the largest data breaches that hit Target right before the Neiman Marcus breach. According to NBC affiliate KSHB, some small businesses that use customer credit card information for direct payment and billing options are encountering massive problems. Small businesses are unable to collect payments from customers with new or no credit cards after their payment methods on file were deactivated or replaced after the Target breach.
Small companies should turn to business insurance to protect themselves and their customers from the effects of cyber-related security risks. Professional liability insurance can protect businesses affected by data breaches within or outside the company.
