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Data Theft: Tort Lawyer’s Paradise
Class-action heroes like law firms Lerach, Bernstein, and Milberg Weiss have made millions suing public companies for everything from price fixing to unexpected stock price drops.
The only career downside for these litigators might be the recent proclivity of some of them to attract criminal prosecutions for manufacturing evidence, attempting to corrupt the court, witness tampering, etc.
But now they’re salivating over the next great class-action gold rush: going after businesses for indifference and incompetence in the face of today’s identity theft epidemic.
Much as we may prefer not to admit it, they’ve got a point. Some stats: phone surveys show that in 2005, eight million Americans were victimized by ID theft, a number that’s got to be much larger now. Each breach costs business itself about $200 without considering the impact on the victims themselves. And breaches are increasingly due to the actions of outsourced suppliers or third-parties, extending the chain of liability beyond the data’s apparent “owner”.
Remember TJX, the $18 billion retailer that permitted the theft of “at least” 45 million customer records about a year ago? They’ve just agreed to pay $41 million to Visa and Third Fifth Bank in an out-of-court settlement. Of course, that doesn’t inoculate TJX against the likes of Lerach. In fact, the judge presiding over that inevitable class-action suit has turned down a settlement proposed by the plaintiffs’ counsel on the grounds that it is too lenient to the defendant.
In a word, businesses collecting personal data have got to get their act together or find themselves subject not only the predations of class-action lawyers, but big-time government fines and more ponderous regulation like that of Sarbanes Oxley. It’s simply a matter of putting the same value on someone’s personal data that the person himself does.
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