Evan Schuman's StorefrontBacktalk

The dramatic nature of killing all passwords certainly suggests that management believed it was a recent incident, in the sense that it would seem unnecessary if the breach had been eight months old. Then again, whenever it was discovered, cleaning out all password files is also the best way to cut losses, so that action may not reveal that much about when the incident had been discovered.

Given that the incident wasn’t announced until Sunday, this case may be eligible for an award for the fastest retail data breach class-action lawsuit ever filed. The lawsuit, on behalf of a Texas customer of Zappos “and on behalf of 24 million similarly situated persons,” was filed on Monday (Jan. 16) in federal court in Kentucky.

That lawsuit filing stated facts that differed from the Zappos statement, and one of the attorneys involved in the case, Ben Barnow, wouldn’t say where that information came from. For example, where the Zappos statement referred to a single “criminal,” the lawsuit said the information was “stolen by hackers.” Beyond the plural versus singular issue, a hacker is simply a resourceful programmer. (We hate the maligning of the honorable hacker title.) Then again, the reference to “stolen” probably gets us to the same place. (But the attacker might not have been a hacker. The attacker might have been lazy and uncreative.)

More seriously, though, the lawsuit said the attack hit “the company’s unprotected servers located in western Kentucky.” Unprotected? Had it claimed “insufficiently protected” or “inadequately protected,” that would have made more sense. Are the attorneys actually saying that the attacked server was completely unprotected? If true, that would be E-Commerce heresy. Barnow declined to clarify.

My favorite part of the statement was a wonderful line, where Zappos’ Hsieh showed the math to support the decision to temporarily shutdown the call center. The move was absolutely correct. But seeing the numbers spelled out for employees—and for customers—is wonderfully powerful.

“We have made the hard decision to temporarily turn off our phones and direct customers to contact us by E-mail, because our phone systems simply aren’t capable of handling so much volume,” the CEO penned. “If 5 percent of our customers call, that would be more than 1 million phone calls, most of which would not even make it into our phone system in the first place.”

Word choices—and informational holes—aside, Zappos’ move looks to be a picture-perfect example of how such a data breach response should be done.

• Halt the damage immediately (clear out all passwords).
• Assign everyone to get involved to make the pain as short-lived as possible.
• Take a painful hit for a few days on revenue and operations and get—in theory—done with the bloody thing relatively quickly.