Retailers Could Soon Be Liable For Hacking Damages In California

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What's Next In Payments®
5:31 AM EDT April 7th, 2014

A bill is making its way through the California state legislature that would make companies like Target liable for damages after successful cyber-attacks against their system expose customer data.  Currently banks and credit card companies are on the hook for customer financial losses as a result of hacking, and the new measure would shift that responsibility to the retailer.

“Financial institutions should not be taking the heat for a data breach that occurs at a retailer,” said Assemblyman Roger Dickinson (D-Sacramento), a bill co-author along with Assemblyman Bob Wieckowksi (D-Fremont), reports the L.A. Times.

The bill also limits the type of information retailers can gather and retain.

The legislation has the support of consumer and privacy advocates, though critics of the measure say it is too sweeping and would be financially disruptive for retailers.

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Comments
  • Douglas J. Mack

    Correct me if I’m wrong, but doesn’t merchant liability already exist under CPP? I am not familiar with to what extent (eg. just fraud, card replacement, etc.). Further, doesn’t the move to EMV also address this concern?

  • http://www.merchantservicesbroker.net Steve Jarrett

    Standby… Ca legislature getting involved with merchant credit card processing. This cannot be good!!

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