By
Andrew Orlowski in San Francisco for The Register
This article has been reproduced from The Register, with
permission.
The Rothken law firm in Marin County, Ca had brought a class
action suit on behalf of cardholders and merchants against
CardSystems Solutions, Visa and MasterCard following a high profile
data ID heist in June.
The suit accused the defendents of violating California state
law by failing to notify them that personal data had been viewed by
hackers, or the data obtained by the intruders.
In June, CardSystems admitted intruders had compromised the
confidentiality of 40 million credit card holders, and 200,000
records had left the network. CardSystems had refused to notify the
card holders. The Rothken suit also requested that chargeback fees
or penalties on hapless card holders who were the victims of ID
theft should be waived.
But a San Francisco Superior Court Judge, Richard Kramer,
disagreed. "I don't see the emergency," he said. "I don't think
there is an immediate threat of irreparable injury" to
consumers.
Visa and MasterCard argued that because their relationship is
with the issuing banks, not the customers, they don't have to
notify the victims.
The Californian
disclosure law, passed in January 2003 and a template for
disclosure legislation in other states, says that consumers should
be notified in the case of ID theft, although it's riddled with
loopholes.
The effects of online security fears are already being felt.
Analyst firm Gartner Group has revised its 2005 ecommerce
prediction downwards this year after 42 per cent of consumers
said they were spending less online because of security fears. Some
14 per cent have stopped paying bills online altogether.
© The Register
2005
