Evan Schuman's StorefrontBacktalk

The state also pointed out that Briar was not PCI compliant at the time of the incident, but details—such as whether Briar attempted to be declared PCI compliant—were unclear. Even after changing its password-management approach, “Briar failed to validate its PCI compliance until April 21, 2010, almost six months after it learned of the data breach, nearly a year after malcode was installed, and only after it was fined by Visa and MasterCard for continued non-compliance with PCI DSS.” Presumably, the state meant a fine was accessed to the processor, which politely passed it along to the retailer.

The state’s filings are consistent on the laundry list of security violations that make TJX’s breach resemble Fort Knox. But elsewhere in the filings, inconsistencies crop up that raise fundamental questions about the legitimacy of the state’s charges.

For example, the state quoted from a Nov. 5, 2009, E-mail from Briars President Austin M. O’Connor. In that E-mail, “Briar’s president noted that he wanted ‘to do the right thing’ but did not want to have to ‘pay for an investigation that [Briar] could somehow avoid.'” The state’s characterization was that the executive “initially expressed reluctance to hire a computer forensics company.”

A few concerns: In the complaint, it quotes O’Connor as saying “pay for an investigation that they could somehow avoid.” In context, the “they” has to refer to Briar. But in what possible context could the Briar president have referred to his company as “they”? Whether it was written to a fellow Briar employee or an outside contractor, it’s hard to envision. The state didn’t say who the E-mail was written to or provide any other context.

Of far greater concern with that E-mail quote is the point the state is trying to make. Clearly, all executives don’t want to pay for probes (or, for that matter, pay taxes or take out the garbage at home). That doesn’t mean they won’t do it, nor does it mean they hesitate to do it. If the state’s point was that O’Connor delayed the probe or somehow weakened the chain’s defense against the breach, it would have said so. The fact that it didn’t makes it unclear what it’s alleging with the quote.

The implication is that O’Connor caused a delay in the probe, but the timeline in the filing doesn’t support the contention of a delay and it isn’t even consistent. For example, one state filing said that “three weeks after Briar was notified by First Data of the breach, and after being required by Visa to retain a Qualified Incident Response Assessor, Briar engaged Verizon” and the next sentence said that Verizon “arrived at Briar’s headquarters on or around Nov. 15, 2009, to begin its investigation.”

Given that Briar received its first notice (from First Data) on October 29, three weeks later would place it on or about November 19. And yet the complaint has Verizon arriving at Briar to begin the investigation on or around November 15. Given that Verizon would have presumably arrived after it had been engaged, this is very confusing.

The state filing also references—without explanation—that “more than 125,000 consumers were harmed by Briar’s conduct.” What was the nature of that harm? There’s a reference to a similar number earlier (“over 53,000 MasterCard and over 72,000 Visa accounts were affected by the data breach, providing a channel for the infliction of fraud on consumers and forcing consumers and their banks to endure the inconvenience, cost and uncertainty of cancelling and re-issuing thousands of credit and debit cards used at Briar.”

But that first number is merely saying how many numbers were involved and spoke of the possibility that some might be impacted (“providing a channel for”). Even if consumers were impacted, wouldn’t they be fully compensated by zero-liability programs from both MasterCard and Visa? The “cancelling and re-issuing” is a bank—as opposed to a consumer—impact. State officials defined what it meant by “consumer harm” as a situation where consumers’ data is put at risk.