http://www.fool.com/investing/general/2014/03/19/target-inc-is-still-a-liability-landmine.aspx
By Rich Duprey
The Motley Fool
March 19, 2014
Three months have passed since the massive data breach at Target (NYSE:
TGT) ended, and though the retailer continues to plug away, investors
should be cautious treading here, because there's still a massive
liability IED waiting to detonate -- and it could blow up anytime now.
As is all too well known now, for several weeks in November and December,
hackers had free rein to access, steal, and sell sensitive customer data
before being discovered and shut down. Some 40 million people -- and
possibly as many as 110 million -- were potentially compromised (I should
know -- I was one of them). What is only just coming to light, however, is
the extent to which all of this was preventable. And because of that,
Target's liability in this financial and public-relations disaster is as
yet incalculable.
Stuff happens. Hackers will hack, and every level of defense erected will
eventually be overcome. From Target to Wal-Mart and J.C. Penney to BJ's
Wholesale Club, all their systems have been hacked at one time or another.
Even AT&T had an incident years back, and though it's unpleasant and
corporations need to implement industry best practices to protect their
customers' data, we almost willfully acknowledge that at some point we may
see our information compromised. Call it a hazard of doing business in the
modern digital age.
What we don't sign onto, however, is a company cavalierly handling our
data, or being more concerned about how its reputation will look instead
of rectifying the problem. TJX (NYSE: TJX) was taken to task several years
ago, when it suffered a data breach and waited a whole month before
notifying customers, costing the retailer more than $100 million in
investigation costs, security system upgrades, customer communications,
and legal fees, as well as some $1.6 billion over the lifetime of the
case.
[...]
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