advertisement
advertisement

Macy’s Ignores Govt. Subpoena For CRM Records In Lead-Tainted Necklace Criminal Case

Written by Fred J. Aun
April 1st, 2009

Macy’s, accused by the Los Angeles District Attorney’s Office of selling lead-tainted necklaces, has taken a confrontational—and controversial—stance: It is refusing to share its CRM databases with the government, even if it means that consumers and children who are at risk of lead poisoning can’t be contacted.

Macy’s has declined to comment on the situation—other than an E-mail to reporters saying that it won’t comment—so the only version of events is coming from the D.A.’s office, which says that Macy’s has provided no explanation whatsoever. This leaves open the question of whether Macy’s is refusing to turn the files over for legal—or other—reasons or if it simply cannot access and thereby produce such records, for technological and logistical reasons.

But Los Angeles Deputy District Attorney Daniel Wright said he is leaning more toward the “won’t” as opposed to the “can’t” theory, at least for some of the requested records. “It’s aggravating,” Wright said. “It’s inexplicable to me.”

Wright said he can understand how the retailer might not know the names and addresses of those who used cash to buy the necklaces that were made in China and imported a California business. But those who used a Macy’s card or even another credit card should be easy to identify through computer records, Wright said.

Wright said he was forced in January to obtain a subpoena compelling Macy’s to reveal the customer information. The company hasn’t responded and a discovery hearing is scheduled for April 7.

The question of using CRM data for product recalls is hardly without precedent. When Costco and other retailers learned in January they’d sold food products containing tainted peanut butter, they went out of their way to use CRM information to identify people who bought the products and issue them alerts. They even placed phone calls.

The peanut butter case and the lead-tainted jewelry case are, of course, significantly different in that Macy’s is facing criminal charges alleging it falsely advertised the necklaces as being “lead nickel free.” Once a crime is asserted, even — as is the case here — if it’s just a misdemeanor, a company tends to go into “admit nothing” mode. Nevertheless, Macy’s will be hard-pressed to defend its stubbornness in either the world of public opinion or on a more “corporate citizen” ethical basis.

Macy’s isn’t explaining itself. “Given this is a matter in litigation, we have no comment to make,” was the most Macy’s spokesman Jim Sluzewski was willing to say.


advertisement

One Comment | Read Macy’s Ignores Govt. Subpoena For CRM Records In Lead-Tainted Necklace Criminal Case

  1. cestmoi Says:

    Given that all companies, esp ones of the stature of Macey’s, are required to be PCI compliant, I would put forth another reason that they may not be able to produce the info that the Attorney general wanted: masked CC# or that they do not even have any of the CC# stored at all.

    Another more sinister reason may be that they are still not PCI compliant and are storing all CC# in plain text? This would be a good reason to NOT hand over their CRM (strictly coming from a PCI perspective).

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.