Fergie's Tech Blog

Bank Back On Hook For Data Theft At BJ's Wholesale

Paul McDougall writes on InformationWeek:

A federal appeals court last week reversed a lower court's order that credit card processor Fifth Third Bancorp did not have to pay for new credit cards for some cardholders whose data was stolen during a 2004 hacking incident at BJ's Wholesale Club.

In ruling, the United States Court of Appeal upheld a challenge to the lower court's decision brought by the Pennsylvania State Employees Credit Union.

Fifth Third provided credit card processing services to BJ's. In its initial complaint, PSECU argued that Fifth Third bore some liability for the data breach because it failed to properly train the retailer's staff in proper security procedures.

The breach led to the pilfering of the names and credit card numbers of thousands of BJ's Wholesale customers and led to millions of dollars in theft-related losses.

posted by Fergie @ 7/21/2008 05:59:00 PM