I have received numerous calls and emails from friends about the recent data breach - and while Epsilon and their major name brand clients affected would like to 'make this go away,' and refer to this as only an e-mail list breach - it is much, much bigger and only a symptom of customer data vulnerabilities. 

Real Chase Customer Alert e-mail... Or is it? (Forwarded from real customer) 

There is no way of knowing whether this email came from Chase or whether it is another step in a massive phishing scheme. Wouldn't the customer data and email hackers also have an account with Chase so they could spoof whatever email follow-up Chase initiated? 

Customer Worthy Excerpt, by Michael R Hoffman

Chapter 12 : Matrix Benefits and Use by Function and Department pg 163 under Legal Department Benefits 

 

Data breeches will continue to grow as more information and transactions

are digitized. As a result, personal and confidential information provided

by customers will be continually at risk. Additionally, company information

stores and data networks will continue to be pirated, poached, and hijacked,

requiring companies to insist on additional third party customer authenticity

validation and authorization among payment systems and partners.

Customer backlash is a likely result of the increased exposure of confidential

data. Legal or governmental representatives may demand specific

disclosures regarding how, why, when, where, and for what purpose customer

information was stored, accessed, and modeled by companies other than

the business customers believed they were dealing with directly. Transparency

is ripe for continued scrutiny, whether to data vendors, credit bureaus,

transaction processors, data exchange, integration companies, subsidiaries,

or lines of business.

It is likely that companies will face not only growing legal and financial

liability for misuse, mishandling, and negligence related to customer data,

but also for not using customer data when that information could benefit

the customer, as in the “Mad Cow” case reported in the Washington Post (July

6, 2004). Although some customers are troubled by the privacy implications

of data capture, many assume that their information will be used to their

benefit. Customers are likely to also assume that they should have access to

their personal information in the company’s context. They will want to see

who had access to their information and how their information was used to

conduct business. If these assumptions are not met, a negative customer

experience could result.

In the “Mad Cow” case mentioned above, a female customer had purchased

ground beef from a local market, using her customer loyalty card,

which recorded every item she bought.

She used the beef to cook a holiday dinner and only a couple of weeks

later learned from a newspaper article that 10,000 pounds of beef potentially

164 customer worthy tainted by mad-cow disease (MCD) had been recalled from stores in Western

states, including hers. She read about another customer whose purchase had

been recalled after he demanded that the store check his customer loyalty

card to determine if the meat he had purchased was part of the recall.

The female customer then asked that her card be checked to verify the

safety of the meat she fed to her family. However, the store made her make

the request in writing and come to the store’s office for the records. She

eventually learned that the meat she had fed her family was part of the

recall. The result was a lawsuit against the store, claiming that it had the

ability to alert her to the recall and did not do so.

Legal CxC Matrix deliverables

Comments? Questions? contact Michael R Hoffman, 908.350.3012