Our View: Should banks share blame for the breaching of Target customer data?

By The SE Texas Record | Feb 11, 2014

With a name like Target, it was only a matter of time before someone went after them.

Still, a data breach during the pre-Christmas season and its devastating impact on the biggest sales period of the year are epic disasters that no respectable retailer would wish on his fiercest rival, much less on himself. 

To be targeted a second time, however – for failing to avoid being targeted the first time – seems a bit much.

The identity of the hackers may remain unknown, but the second target-er of Target is Beaumont’s own Walter Umphrey, plaintiffs attorney extraordinaire.

Provost Umphrey Law Firm LLP filed a class action suit against Target last month in U.S. District Court in Minnesota on behalf of Community Bank of Texas NA, FNBT.com and other similarly situated banks. In addition to being the managing partner at his law firm, Umphrey is senior chairman of the board and director of Community Bank.

“This nation’s financial institutions, including Community Bank and FNBT, have been left on the hook for tens, if not hundreds, of millions of dollars as a result of Target’s failure to implement reasonable and industry-standard measures,” Umphrey’s suit states.

Though unclear about the extent of the banks’ losses, Umphrey is certain that Target was guilty of negligence and is seeking treble and exemplary damages.

If indeed it was negligent, Target may not have been the only guilty party.

At a U.S. Senate hearing last Tuesday, Target’s chief financial officer announced that the chain is spending $100 million to upgrade its credit card system.

An article posted on CNNMoney that same day noted that an upgrade is in order for the nation’s entire credit card system.

“That requires a major investment by the retail and finance industries,” CNNMoney explained. “Stores need to install new hardware to accept so-called chip-and-PIN cards, and banks need to issue these more expensive models.”

Which seems to suggest that banks may share some of the blame.

Not that any of this matters to Mr. Umphrey. He’s suing because he can use the courts to try to extract his very own pound of flesh.

Solutions? That’s someone else’s problem.

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