Southeast Texas Record

Sunday, April 5, 2020

Texas, other states reach $1.5 million settlement with Neiman Marcus over data breach


By Gabriel Neves | Jan 16, 2019

Credit card tech

AUSTIN – Texas Attorney General Ken Paxton has reached a $1.5 million settlement with Dallas-based retailer Neiman Marcus resolving a data breach investigation that started in 2014.

As stated in a press release issued on Jan. 8, "the breach, which affected 65,644 Texans, exposed customer credit card data at 77 Neiman Marcus stores nationwide." 

In 2013 over a one-month period, about 370,000 credit cards were accessed by an unknown third party, with at least 9,200 of those cards being used fraudulently, the press release states.

Under the terms of the settlement, per the release, "Neiman Marcus will maintain reasonable procedures to protect its customers’ personal information and guard against future attacks by hackers," as well as it "must obtain an information security assessment and report from a qualified third-party professional and detail any corrective actions that it takes."

The attorney general reemphasized the need to safeguard consumers from data breaches.

"Texas law requires businesses to implement and maintain reasonable safeguards against cyberattacks to protect consumers’ personal information from unlawful use or disclosure,” Paxton said in the release. "I urge companies to evaluate whether they have in place a thorough and ongoing written information security program that serves to safeguard their customers’ information.”

The investigation was conducted per the Texas Identity Theft Enforcement and Protection Act, a law that went into affect in 2007 that governs cases of identity theft and the adequate remedies for those cases.

The Attorney General's Office will receive a total of $95,000 in attorney's fees and costs for the settlement, which is part of a group of agreements made between Neiman Marcus and 43 U.S. states, with the $1.5 million being split among the states that conducted investigations on the data breach.

In addition to Texas, the states that settled the case include Arizona, Colorado, Florida, Illinois, Michigan, New Mexico, New York, Pennsylvania, Tennessee, Utah, Virginia and Washington.

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