business news in context, analysis with attitude

Yesterday, MNB took note of a Reuters report that a US district judge in Minnesota has ruled that Target must defend itself in a lawsuit "by banks seeking to recoup money they spent reimbursing fraudulent charges and issuing new credit and debit cards because of the retailer's late 2013 data breach."

Target had sought to have the suit dismissed.

The judge said that because Target played a "key role" in making its systems accessible to hackers, "this justified letting the five bank plaintiffs, which seek class-action status on behalf of lenders nationwide, pursue much of their lawsuit accusing the second-largest U.S. discount retailer of negligence and violating Minnesota consumer protection laws. The banks are seeking millions of dollars in damages."

My comment:

I think in cases like this, Target at the very least must face the accusations in court, where evidence will be introduced and witnesses examined and cross-examined. I have no sympathy for banks, but the issue of culpability - both in this case, and in the larger scheme of things, considering the degree to which hacking has become a major issue - must be decided.

One MNB user disagreed:

If I follow the judge’s logic, then if the cash in a retail store register is stolen, the store owner had a “key role” in making the cash drawer “available” to the guys with the guns?     Wow.

Rather, I think the logic behind the ruling is that there have been reports that Target did not do everything it could have done to prevent the breach, and should at least have to defend itself in court.

I would assume that Target's lawyers will argue that the banks have as much or more culpability.

That's what courtrooms are for. They are where innocence and guilt, not to mention responsibility, are supposed to be determined.

(This is a statement that would be viewed with some ironies in certain American neighborhoods, I concede.)

On the same subject, another MNB reader wrote:

Maybe they will finally get off that CurrentC bandwagon which is even more hackable and allow customers to use secure Apple Pay.  If credit cards were hacked, I’m not about to give Target and others access to my bank account through CurrentC where hacking consequences rest with me.  No way, no how.  I will continue to swipe my credit cards where I have protection from my bank before I’ll ever go to CurrentC at Target or anywhere.  I was one of those hacked at Target and at Home Depot, and a few years prior at Target was compromised on my checking account by the company Target used to approve or disapprove checks.

It seems really odd that one of the major retailers suffering a huge data breach refuses to allow customers to use what is currently the most secure payment system on the planet, and that being Apple Pay.  It seems that many of the others also suffering data breaches are following down the same path.  What could they be thinking…….is it cheaper to be sued for data breaches and hope to get into customers bank accounts to avoid credit card charges than it is to go to what customers want to use for security and that is Apple Pay?  I have made it a point to shop first where Apple Pay is allowed, and where it is not will continue using my credit card.

And there's one of the arguments that will determine Target's culpability.

From another reader:

Not to defend Target on the data breach and subsequent legal problems, but I hope that Target’s lawyers would launch a counter suit against the banks for denying American consumers (and merchants) access to the more secure credit cards and credit card processing systems that have been in place elsewhere in the world for years.

I hate to see anything happen that will keep so many lawyers employed. But I think this issue has to be decided, and I can't see any other alternative for a comprehensive hearing and airing of the facts.

On another subject, and MNB reader sent the following email:

Good post this morning about Martha Stewart and magazines. A few thoughts on her declining empire.

Her brand is built around her. At 73 years old, she will have her challenges connecting with a new, younger audience (and likely cashing out, if and when, the time comes).  A few icons in the fashion industry have successfully kept their brands alive by bringing in very talented designers to stay current but it is very hard to do when you are both the name, and the face, of your brand.

Pinterest. The first time I went on Pinterest, my initial reaction was “wow, this might kill the magazine industry”.  Pinterest is always current, interesting, custom tailored to its audience and immediately allows the user to tailor their clicks to their interests, in that moment. Magazines will be challenged to compete with that, in print, and on line.  We have ditched every magazine subscription except Ski magazine. Some old habits die hard.

Precisely. But only some.

And, remarking on the headline used on our FreshTalk story yesterday, one MNB reader wrote:

Outstanding Chico Escuela reference, Kevin!!!

I love it when folks get the jokes and references.

Of course, I'm painfully aware that I've violated the very rule that Chris Rock talks about in our "Eye Opener" piece, above … because there is a sizable percentage of the MNB audience that has absolutely no idea who Chico Escuela is.

C'est la vie.
KC's View: