By Kendra Srivastava | Thu Apr 28, 2011 11:43 am |
Sony is facing a lawsuit for failing to protect PlayStation customer accounts from a hacker, sending the company scrambling to regain consumer trust.
The suit alleges Sony provided inadequate security for customer information, allowing a hacker from gaining access to more than 77 million PlayStation accounts and stealing personal information, possibly including credit card numbers.The lawsuit also accuses the entertainment company of waiting too long to disclose the problem. "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 U.S. history," according to the complaint, filed by a California firm on behalf of a long-time PlayStation owner. Companies are handling ever-increasing volumes of customer data, including financial details, but maintaining effective security appears to be an ongoing challenge. Sony immediately shut down its network on April 19 when it learned of the breech, but waited to inform the public until April 26, and then only after it had unveiled the new S1 and S2 tablets. The company says it waited so long because it was trying to determine exactly what unencrypted data the hacker stole, which now appear to be names, e-mail addresses, birthdates, login information and purchase history. A Sony FAQ now informs customers about what happened in detail and says data is being moved to a more secure location. The company is also creating a software update requiring users to change their passwords once the network goes online again. Credit card companies say they have not seen any unusual activity, but that didn't prevent Sony's shares on the Tokyo Stock Exhange from plummeting by 4.8 percent to close at their lowest since 2009. Sony will need to work hard to recover, given that it was already suffering supply shortages after the Japan earthquake and facing a long uphill battle to revamp its ailing smartphone line. If it loses the lawsuit, it may have to cough up tens of millions of dollars, putting it even further in trouble as disgruntled gamers consider defecting to Xbox. Sony isn't the only one in hot water over security issues these days. A hacker recently stole customers data from many top U.S. retailers by attacking a single marketing company that held millions of consumers' e-mail addresses. The U.S. Senate has proposed a "privacy bill of rights" to protect consumers against data theft and misuse, signaling increased governmental attention to growing Internet security issues. The U.K. already has power to fine companies up to $500,000 if they fail to adequately protect consumers' personal data.
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