By George Anderson
The discount shoe chain, Designer Shoe Warehouse, has agreed to put in place a more comprehensive security plan to protect customers' financial information following the discovery that the records of 1.5 million consumers had been stolen back in March.
An investigation found that hackers had broken into the company's database and stolen credit, debit and checking account information from consumers in 25 states. Among the consumers who had their financial information compromised was Federal Trade Commission chairman Deborah Platt Majoras.
A suit filed by the FTC charged DSW with holding onto sensitive information that was no longer needed by the company and storing it in multiple files, thereby increasing the risk to DSW's customers.
The chain said in a released statement that it did not agree with the findings of the FTC but that its plan to upgrade security measures, including having its systems audited by independent experts over the next 20 years, "validates the importance we place on security and brings closure to this matter."
DSW maintains that it notified customers immediately following the discovery its system had been compromised. The company said losses related to the security breach will be between $6.5 million to $9.5 million.
The theft case remains open.
Moderator's Comment: What lessons in security and public/customer relations can be learned from the DSW case? How are best in class companies protecting consumers' personal and financial information? - George Anderson - Moderator