Suit charges Sony breach caused by poor security

Computerworld - Sony has been hit with what could be the first of many lawsuits related to a recently disclosed breach of its PlayStation Network.

Kristopher Johns of Birmingham, Ala., Wednesday filed a lawsuit against Sony in federal court in San Francisco, alleging negligent data security practices, privacy violations and breach of warranty.

The lawsuit, which seeks to represent all subscribers to Sony's PlayStation Network and Qriocity service, also accuses Sony of not informing consumers quickly enough about the exposure of their personal account information and credit card data due to the breach.

In his complaint, Johns accused Sony of violating the Payment Card Industry Data Security Standard by failing to implement a proper firewall and to encrypt card holder data. Sony also violated the standard by retaining card holder data, the lawsuit charged.

The company's delay in notifying consumers about the breach significantly heightened the risk that the data would be misused, Johns alleged.

Sony has acknowledged that unknown intruders breached the PlayStation Network between April 17 and 19. The intrusion compromised the names, addresses, birth dates, purchase histories, online IDs and in some cases credit card data, of 77 million subscribers to PSN and its Qriocity service, the company said.

Sony disclosed the breach more than six days after it had abruptly shut down PSN.

"As a result of wrongful acts and omissions [by] the Defendant in this case, consumers and merchants have been exposed to what is one of the largest compromises of Internet security and the greatest potential for credit card fraud to ever occur in United States history," the lawsuit claimed.

Johns is seeking compensation for the time and effort consumers will need to spend in monitoring for identity theft and fraud as well for breach of service and warranty.

The lawsuit seeks both compensatory and punitive damages from Sony.

Sony said yesterday that it has begun notifying 77 million affected consumers about the breach.

In a blog post Wednesday, Patrick Seybold, Sony's senior director of corporate communications and social media, said the company started notifying registered account holders by email on Tuesday. "At this time, the majority of emails have been sent and we anticipate that all registered accounts will have received notifications by April 28th," Seybold wrote.

In the post, Seybold contended that all the credit card data of account holders had been encrypted and stored in a password protected file. He reiterated the company's previous claim that there's no evidence that the data has been compromised.

"The personal data table, which is a separate data set, was not encrypted, but was, of course, behind a very sophisticated security system that was breached in a malicious attack," he added.