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Neiman Marcus Settles Data Breach Class Action for $1.6M

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By George Khoury, Esq. on March 30, 2017 6:57 AM

In 2014, a class action lawsuit was filed against Neiman Marcus as a result of a data breach in 2013 that exposed the personal data of approximately 350,000 shoppers. The data breach was the result of a hack, and caused the retailer much bad press at the time it was discovered as customers complained about fraudulent charges.

However, recently, the parties have reached a tentative settlement agreement that calls for the retailer to set up a $700,000 claims fund that class members would be able to seek payment from. If a customer can show that they shopped at Neiman, Bergdorf Goodman, Last Call, or Cusp, between July and October 2013, and that their information was part of the breach, they may be entitled to receive $100. Meanwhile, the attorneys are expected to receive approximately $900,000 in fees and costs. Despite the disparity in attorneys' fees and the class recovery, the parties expect the court to approve the settlement.

Customer Data Security

When customers provide their credit card information to retailers, which happens every time a consumer swipes their credit card at a retailer, a retailer takes on the duty of safeguarding that information. If a retailer fails to safeguard a consumer's financial information, and the consumer suffers damages as a result, a retailer can likely be held liable for negligence, as well as under other legal theories. While debit cards may be a convenient way to shop, consumers should be aware of the fact that using an actual credit card provides an added layer of protection against these types of hackers and scammers.

While it may not be shocking anymore when a retailer gets hacked, or has a digital security breach, the consequences can be severe for both retailers and customers. Recently, another upscale retailer, Saks Fifth Avenue, suffered a data breach that released customer information, including email addresses, phone numbers, publicly.

Although no credit card information was seemingly exposed publicly, the fact that this data is out there raises several red flags. Additionally, since this information was discovered, it has been found out that many other pages of Saks's website are not secure.

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