December 18, 2017 Articles

Payment Card Data Breach Class Actions: Who Foots the Bill?

Examine the economic consequences of payment card data breaches for financial institutions in class action lawsuits

by Shireen Meer, Claire MacKoul, and Robin Cantor

Payment cards are commonly used instead of cash to purchase goods and services at retail outlets. These transactions require the transfer of consumers' payment card information through a network of industry players. At each stage of transfer, consumers' information is potentially vulnerable to hackers. Given the ubiquity of payment cards, it should be no surprise that payment card data breaches are commonplace in today's data-driven economy. These breaches compromise sensitive information and ultimately can result in some form of harm to the parties whose information has been compromised. It is not surprising that litigation follows in the wake of such large data breaches. The large scale of potential losses that can result from these data breaches has stimulated questions regarding liability for the incidents—i.e., who should foot the bill?

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