Macy’s Cites Privacy In Fighting D.A.’s CRM, POS Subpoena

Written by Evan Schuman
April 8th, 2009

Fighting a subpoena for CRM and POS data from the Los Angeles District Attorney, Macy’s attorneys are arguing that privacy expectations prevent them from revealing the names of their customers who purchased children’s jewelry made with potentially toxic lead levels. The D.A. argues that it needs the names so that the consumers can be contacted to try and stop the health threat.

The case raises many critical retail IT issues, including how private—or proprietary—the courts should consider data, including purchase histories from CRM/loyalty and POS payment files. Beyond privacy issues, such subpoenas could force retailers to publicly reveal that they are collecting and saving a lot more information than they want to disclose. There are also PCI implications, where a merchant could theoretically be shown to be saving prohibited payment card data.

The L.A. D.A. is prosecuting a criminal complaint against Macy’s, accusing the chain of falsely advertising that the children’s jewelry was lead- and nickel-free. The U.S. Consumer Product Safety Commission was involved in a recall of the jewelry in February 2008 and estimates that some 2,900 necklaces were sold from January 2006 through November 2007. “The children’s necklaces contain high levels of lead. Lead is toxic if ingested by young children and can cause adverse health effects,” the U.S. Consumer Product Safety Commission notice said.

Macy’s lawyers have asked state Superior Court Judge Frederick Rotenberg to dismiss the charges and Rotenberg on Tuesday (April 7) scheduled arguments on the case for May 4. In a motion filed with Rotenberg seeking to quash the subpoena, Macy’s argues that turning the names over is not appropriate because the nature of this criminal case is about false advertising and not the recall nor consumer notification.

“Macy’s promises its customers to keep their personal information confidential except in certain limited circumstances. Macy’s customers therefore have a reasonable expectation that any identifying information collected and retained by Macy’s as a result of their purchases will be kept confidential and not disclosed unless Macy’s is compelled to do so by proper legal process,” wrote Macy’s attorney Donald Etra. “As the privacy concerns of third parties is high and the usefulness of the documents to the people’s prosecution of the false advertising claims against Defendants is non-existent, production should not be required.”

It’s a new twist to the privacy argument, in that it’s unlikely that most of the impacted consumers would object if they alerted that they have children’s jewelry with potentially toxic lead levels. How many of them would consider such contacts to be privacy violations?

The filing also said that Macy’s may—or may not—have the information being sought, but those details are intriguing.


2 Comments | Read Macy’s Cites Privacy In Fighting D.A.’s CRM, POS Subpoena

  1. Ron Ziff Says:

    This situation shows the arrogance of this New York based company. They obviously have zero concern for the welfare of their customers children.

    They could show concern and possibly defuse much of the problem by notifying as many customers as possible on their own (while still keeping names private).

    My wife and I refuse to shop at Macys for 2 reasons. The 2nd may be part of their problem in this case.
    1) They show East coast styles. We live on the West coast.
    2) Their customer retention record keeping is shoddy. They took over our local chain department store in 1994. Closed it, rebuilt, and opened in 1996. We went in to buy a gift. We were told they canceled our credit card and destroyed the records because we had not shopped there for 2 years. I pointed out that they had closed the store for 2 years. That was the problem. They said “It makes no difference. You have to reapply.” Pure arrogance! Since 1996 we have found other places very willing to work for our business.

    Back to the situation with the DA. The fact that they destroy records after a relatively short period of time may be their problem. It could be that the the further it goes the more they will have to reveal about shoddy practices. -Or it could just be arrogance.

  2. Janet Abbott Says:

    Well I used to work there and I thought that you had to use a card within one year (not two) in order to keep an account active during any closures. Ultimately it is helpful for us to re-familiarize ourselves with the terms of any credit cards we use in order to prevent an easily avoidable problem such as this one from occurring. I do think that the measure is one that is in place to help prevent abuse of inactive accounts. And if someone had gotten a hold of your info during that closure and had run up a big bill you might have alternatively wondered why they would leave unused accounts active when they are known to be targets of identity theft criminals. So perhaps the assumptions about arrogance are misplaced as I don’t think that has anything at all to do with the decision to do whatever is within their ability to do to protect targeted account.


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