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Two Philadelphia law firms have filed class action suits on behalf of all cardholders in the U.S. who had their credit or debit card data stolen in the Heartland Payment System (HPY) data breach. This brings to three the total number of class action lawsuits filed against the Princeton, NJ-based payments processor. The law firm of Berger & Montague filed a class action suit in the U.S. District Court for the District of New Jersey, alleging Heartland's failure to safeguard cardholder data when the company's computer systems were hacked and cardholder data was stolen. Heartland says last year it processed 100 million card transactions per month, but an unknown number of cards were impacted by the breach. The law firm says fraudulent activity has occurred on some of those cards. The law firm alleges that Heartland's security measures and intrusion detection systems were inadequate. "Because of Heartland's inadequate data security, cardholders have had their card information compromised, have been exposed to the risk of fraud, have spent and will spend time to monitor their accounts and dispute fraudulent charges, and have suffered other economic damages," the law firm says in its statement regarding the suit. Berger & Montague were also co-lead counsel in the consumer class action suit brought against TJX Companies, which resulted in a $200 million settlement. The third class action lawsuit filed in February against Heartland comes from Sheller P.C. of Philadelphia, PA. Sheller's suit against Heartland has similar charges against the payment processor. Sheller P.C. also filed its class action lawsuit in the U.S. District Court for the District of New Jersey. Sheller P.C. has also filed a consumer class action suit against RBS WorldPay for its security breach that was made public on Dec. 23, 2008. Previously, Chimicles & Tilellis LLP of Haverford, PA filed suit in the U.S. District Court for the District of New Jersey on behalf of Woodbury, MN resident Alicia Co

Exactly one week after the Heartland Payment Systems (HPY) breach was first announced to the public, the first lawsuit has been filed against the payments processor. The class action lawsuit filed Tuesday by Chimicles & Tilellis LLP of Haverford, PA in the U.S. District Court for the District of New Jersey on behalf of Woodbury, MN resident Alicia Cooper, asserts that Heartland "made unreasonably belated and inaccurate statements concerning the breach." The complaint says Heartland does not appear to be offering any credit monitoring services or other relief to consumers affected by the breach. Chimicles & Tilellis' complaint also says in addition to the questionable timing of the announcement of its breach, (Read Heartland Class Action suit PDF) "there are materially misleading statements and omissions in Heartland's public description of the breach and its consequences." Heartland announced the breach in a press release on the same morning of President Barack Obama's inauguration. The law firm says it is suing on behalf of consumers whose sensitive financial information was compromised in the data breach at Heartland. The complaint raises a claim pursuant to the New Jersey Consumer Fraud Act, and asserts causes of action for negligence, breach of implied contract, breach of contracts to which Plaintiffs and Class members were intended third party beneficiaries, breach of fiduciary duty, and negligence. The payments processor did not disclose how many credit card account numbers were compromised as a result of the breach. Heartland is the fifth largest payment processor in the country and handles 100 million transactions per month for more than 250,000 small retailers, gas stations, restaurants and other small and midsized companies. The suit also states that Heartland only became aware of the breach after it was notified of patterns of fraudulent credit card activity by VISA and MasterCard. "Analysts have stated that the fact that Heartland did not detect th

A federal judge said he will decide in the next few days whether supermarket giant Hannaford Bros. is potentially liable for damages because of a data breach that exposed more than 4 million credit and debit card numbers to computer hackers. Judge D. Brock Hornby heard arguments on Wednesday at U.S. District Court. Attorneys for Hannaford asked the judge to dismiss the lawsuit, which was filed against the Scarborough-based company last year. Attorneys for the plaintiffs said Hornby should certify the case as a class-action suit and let it proceed toward trial. The upcoming ruling will determine whether parts or all of the suit will go forward. The case boils down to a couple of central questions: To what extent are merchants responsible for securing the electronic data that gets processed with every noncash purchase, and what should the consequences be when that data is stolen? "These are fascinating and difficult issues," Hornby said after hearing the arguments Wednesday. "I'll get a written decision out to you as soon as I can." Between Dec. 7, 2007, and March 10, 2008, hackers stole credit and debit card numbers, expiration dates and PIN numbers from people shopping at Hannaford supermarkets. The grocery chain operates more than 200 stores under various names in New England, New York and Florida. More than 4 million card numbers were exposed, and by the time Hannaford publicly announced the breach, on March 17, 2008, about 1,800 fraudulent charges had been made.

Four HIV-positive patients whose records were left behind on an MBTA train by a Massachusetts General Hospital employee are suing the hospital, claiming their privacy has been breached. In March the hospital notified 66 patients who received care at its Infectious Disease Associates outpatient practice that billing records bearing their names, Social Security numbers, doctors, and diagnoses had been lost by a manager who was riding the Red Line. She had brought the paperwork home for the weekend, but left it on the train when she returned to work the morning of Monday, March 9, according to hospital security reports. Last week two patients who are HIV-positive filed a suit in Suffolk Superior Court against the hospital and the unidentified billing manager. The unnamed plaintiffs have been joined by two other HIV-positive people. The legal action was first reported in the weekly newspaper Bay Windows. Their lawyer, John Yasi of the Salem law firm Yasi and Yasi, said in an interview he has filed a motion to make the suit a class action that could cover all 66 patients, a significant number of whom are also HIV-positive. "The damages that jump out are the emotional distress surrounding the loss of obviously very sensitive medical information and secondarily the loss of personal security information," he said. "A Social Security number in reality may lead to identity theft, which we all know is a nightmare."

A couple in Pittsburgh whose lawsuit claimed that Street View on Google Maps is a reckless invasion of their privacy lost their case. Aaron and Christine Boring sued the Internet search giant last April, alleging that Google "significantly disregarded (their) privacy interests" when Street View cameras captured images of their house beyond signs marked "private road." The couple claimed in their five-count lawsuit that finding their home clearly visible on Google's Street View caused them "mental suffering" and diluted their home value. They sought more than $25,000 in damages and asked that the images of their home be taken off the site and destroyed. However, the U.S. District Court for Western Pennsylvania wasn't impressed by the suit and dismissed it (PDF) Tuesday, saying the Borings "failed to state a claim under any count." Ironically, the Borings subjected themselves to even more public exposure by filing the lawsuit, which included their home address. In addition, the Allegheny County's Office of Property Assessments included a photo of the home on its Web site. The Borings are not alone in their ire toward the Google Maps feature. As reported earlier, residents in California's Humboldt County complained that the drivers who are hired to collect the images are disregarding private property signs and driving up private roads. In January, a private Minnesota community near St. Paul, unhappy that images of its streets and homes appeared on the site, demanded Google remove the images, which the company did. However, Google claims to be legally allowed to photograph on private roads, arguing that privacy no longer exists in this age of satellite and aerial imagery. "Today's satellite-image technology means that...complete privacy does not exist," Google said in its response to the Borings' complaint Not long after the feature launched in May 2007, privacy advocates criticized Google for displaying photographs that included people's faces and car license

It was only a matter of time! Auditor accuracy being examined in lawsuit may signal change in PCI and other compliance processes.

When CardSystems Solutions was hacked in 2004 in one of the largest credit card data breaches at the time, it reached for its security auditor's report. In theory, CardSystems should have been safe. The industry's primary security standard, known then as CISP, was touted as a sure way to protect data. And CardSystems' auditor, Savvis Inc, had just given them a clean bill of health three months before. Yet, despite those assurances, 263,000 card numbers were stolen from CardSystems, and nearly 40 million were compromised. More than four years later, Savvis is being pulled into court in a novel suit that legal experts say could force increased scrutiny on largely self-regulated credit card security practices. They say the case represents an evolution in data breach litigation and raises increasingly important questions about not only the liability of companies that handle card data but also the liability of third parties that audit and certify the trustworthiness of those companies. "We're at a critical juncture where we need to decide . . . whether [network security] auditing is voluntary or will have the force of law behind it," says Andrea Matwyshyn, a law and business ethics professor at the University of Pennsylvania's Wharton School who specializes in information security issues. "For companies to be able to rely on audits . . . there needs to be mechanisms developed to hold auditors accountable for the accuracy of their audits." The case, which appears to be among the first of its kind against a security auditing firm, highlights flaws in the standards that were established by the financial industry to protect consumer bank data. It also exposes the ineffectiveness of an auditing system that was supposed to guarantee that card processors and other businesses complied with the standards. Credit card companies have touted the standards and the auditing process as evidence that financial transactions conducted under their purview are secur

Two high school girls are suing their local District Attorney after he threatened to file child sex abuse charges against them over a cellphone photo of themselves in their bras. Marissa Miller and Grace Kelly, both now 15, were 13 when the picture was taken at a slumber party. It is believed to show the two friends from the waist up, both wearing bras. Several of their classmates had a copy of the photo stored on their cellphone, thanks to a craze called 'Sexting', where provocative cellphone images are exchanged between young people. The girls both attend Tunkhannock Area High School, Pa. The image in question found its way to District Attorney George P. Skumanick of Wyoming County after it was discovered on one student's confiscated cellphone. Skumanick was indignant enough to threaten all of those involved - either because they were found to be in possession of the image or because they were identified from the photo - with child sex abuse charges if they did not attend a ten hour class on pornography and sexual violence. Such charges, if filed, could lead to jail time as well as potentially having to register as a sex offender for anyone convicted. Seventeen other students accepted the 'deal' and agreed to go on the course. The parents of Marissa, Grace, and one other girl, however, felt that the threat from the DA was over-zealous and are fighting back. With the help of the American Civil Liberties Union, they have filed suit against Skumanick in federal court in Scranton, Pa. The lawsuit asks the court to prevent Skumanick from filing charges against them, arguing that they had a right under the first and fourth amendments to refuse his deal and contending that his threat of sexual abuse charges was retaliatory in nature.

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Payment processor Heartland Payment Systems has been sued over a data breach it disclosed publicly on Inauguration Day last week. The lawsuit, filed on Tuesday in U.S. District Court in Trenton, N.J., alleges that Heartland failed to adequately safeguard the compromised consumer data, did not notify consumers about the breach in a timely manner as required by law, and has not offered to compensate consumers for costs they may incur in protecting themselves from identity fraud. In a statement that coincided with President Barack Obama's inauguration events, Heartland said the breach occurred last year but that it found evidence of the intrusion only in the previous week and immediately notified law enforcement and credit card companies. Heartland was alerted in late October to suspicious activity surrounding processed card transactions by Visa and MasterCard and hired forensic auditors who uncovered malicious software that compromised data in the company's network, said Robert H.B. Baldwin Jr., chief financial officer of Heartland, last week. The lawsuit seeks damages and relief for the "inexplicable delay, questionable timing, and inaccuracies concerning the disclosures" with regard to the data breach, which is believed to be the largest in U.S. history. Heartland executives have declined to specify how many consumers or accounts were affected. The company handles 100 million transactions per month for more than 250,000 merchants. The lawsuit, first reported by SearchSecurity news site, also accuses Heartland of negligence in taking more than two months to determine the existence and scope of the breach and criticizes the company for failing to identify which merchants were affected by the breach. The suit was filed on behalf of Woodbury, Minn., resident Alicia Cooper, who was notified last week by her credit union that a card associated with her account was included in the breach. It seeks class action status. A Heartland spokesman said the company could no

Jan 15, 2009 There may be only a handful of days left in the Bush administration, but the brouhaha over White House e-mail retention policies promises to continue right up to the last day. A federal court yesterday extended a preservation order to ensure that the outgoing administration does everything it can to recover any missing White House e-mails. The White House IT staff now has five days to scour workstations for missing e-mail before administration data records are archived on Jan. 20. The ruling, by U.S. District Judge Henry Kennedy Jr., also orders staff of the Executive Office of the President (EOP) to relinquish any digital media that may contain e-mails from March 2003 and October 2005. The legal action is the latest resulting from a lawsuit filed in September 2007 by the National Security Archive against the EOP, seeking to preserve and restore White House e-mails it alleged were missing. "There is nothing like a deadline to clarify the issues," Tom Blanton, the National Security Archive's director, said in a statement. "The White House will complain about the last-minute challenge, but this is a records crisis of its own making." The Archive, an independent nongovernmental research institute based at George Washington University, is a repository of government records and does not receive U.S. government funding. The Citizens for Responsibility and Ethics in Washington (CREW), a left-wing public advocacy group, also filed suit, but its legal action was subsequently consolidated with the Archive's legal action, which is taking place in the U.S. District Court for the District of Columbia. Last May, the White House's top tech staffer acknowledged that three months of data were missing from backup tapes. In earlier testimony before a congressional committee, White House technical staff said millions of e-mails from the past eight years could potentially have been erased. Also yesterday, Magistrate Judge John M. Facciola held an emergency status con

All but one of the legal claims filed against Hannaford Bros. -- the Maine-based retailer that suffered a security breach exposing some four million credit and debit cards -- has been dismissed. U.S. District Court Judge Brock Hornby threw out the civil claims against the grocer for its alleged failure to protect card holder data and to notify customers of the breach in a timely fashion. In dismissing the claims, Hornby ruled that without any actual and substantial loss of money or property, consumers could not seek damages. The only complaint he allowed to stand was from a woman who said she had not been reimbursed by her bank for fraudulent charges on her bank account following the Hannaford breach.

I. INTRODUCTION The globalization revolution is undeniably well underway. Some of the primary leaders of the revolution are the off-shoring outsourcers of the world in search of readily available talent at prices below what is available in the traditional geographical outsourcing centers. Certainly, U.S. companies seeking information technology resources--as well as those looking for human resources to support the ever-growing customer care requirements of their business--are at the forefront of the movement. Some of those companies are seeking their own solutions, but many have turned to business process outsourcing companies for assistance. Business process outsourcing is, generally speaking, the contracting of a specific business task to a third party service provider. Processes that are best suited to be outsourced are those that a company requires but does not depend upon to maintain its position in the marketplace. There are two primary categories of business process outsourcing. One category is commonly referred to as "back office outsourcing" which includes internal business functions such as billing or purchasing. The other category is commonly referred to as "front office outsourcing" which includes customer-related services such as marketing, customer contact management, and technical support. The globalization of business in general has resulted in the need for companies to be able to provide support to their customers in many different languages. At the same time, developments in technology have provided the ability for business process outsourcers to provide a cost effective global delivery platform. The convergence of the need for a portfolio of services to be sourced globally with the ability of business process outsourcers to do so on a cost effective basis has driven the outsourcers to geographic locations previously ignored by most business sectors. By many estimates, there are currently off-shore outsourcing vendors in more than 175 different

State and federal lawmakers continue to introduce bills regulating the collection, use and security of consumer and personal information. The proposed federal bills could change the national privacy framework. At the same time, regulators and the plaintiffs' bar remain focused on privacy and security issues and continue to initiate enforcement actions and class action suits. This program will address these developments and provide tips for managing privacy concerns in an era of fast-changing privacy laws.

"A federal prosecutor tracked down a Seattle fraud suspect in Mexico this year through his Facebook posts. A man's Twitter messages to fellow demonstrators at a recent protest in Pittsburgh led to an FBI search of his home and short-lived charges of interfering with police. The CIA and other U.S. intelligence agencies reportedly are investing in a software firm that monitors half a million social networking Web sites each day. There's nothing wrong with law enforcement agencies' using Internet technology to investigate crimes, Bay Area privacy advocates say. But they want the federal government to say how, when and why its agents look at Americans' social networking accounts."

A court has handed Blockbuster a preliminary defeat in a potential class-action lawsuit filed as a result of its participation in Facebook's ill-fated Beacon ad program, which notified members about their friends' e-commerce activity. U.S. District Court Judge Barbara Lynn in Dallas ruled that the case could proceed in court even though Blockbuster's contract with users calls for any disputes to be heard by an arbitrator rather than in court, and also says that users waive their right to file a class action lawsuit. Lynn determined that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time. A Blockbuster spokesperson declined to comment on the case or state whether the company will appeal. The decision is a blow to Blockbuster because individual consumers would have had a difficult time bringing cases one-by-one against the company. But the decision paves the way for attorneys to argue that all consumers affected by Blockbuster's participation in Beacon should be able to proceed as a class. Internet law expert Venkat Balasubramani said Lynn's decision invalidating Blockbuster's user agreement was potentially far-reaching because many Web companies reserve the right to make changes to their terms of service. "It seems broad and could have impact on the terms of service used by a lot of different companies," he said.

Big Brother may be at it again. Behavioral advertising - the tracking of consumer's Internet surfing activity to create tailored ads - has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne