Bloomberg News

Michaels Stores Sued After Reporting Possible Data Breach (1)

January 27, 2014

Michaels Stores Inc. (MIK:US), the world’s largest arts-and-crafts retailer, was sued by a customer for failing to safeguard data after the company said some payment-card information may have been used fraudulently.

The Irving, Texas-based company said Jan. 25 that it “recently learned of possible fraudulent activity on some U.S. payment cards that had been used at Michaels, suggesting the company may have experienced a data security attack.”

Christina Moyer, an Illinois consumer, sued the company today in federal court in Chicago, accusing Michaels of breaching an implied promise to protect that information. Moyer claims she and other customers on whose behalf she filed the complaint must spend time and money to deal with the consequences.

The attack, if confirmed, would make Michaels at least the third U.S. retailer since December to disclose a client data security breach. Target Corp. (TGT:US) has said about 40 million credit and debit card accounts were violated during last month’s holiday shopping season and that personal information about as many as 70 million individuals was stolen. Customers filed about two dozen lawsuits against the Minneapolis-based business within the first week of its Dec. 19 disclosure, and more since.

Neiman Marcus Group Ltd., the Dallas-based luxury department store operator, last week said 1.1 million customer credit cards may have been compromised in a data breach occurring last year. The Target and Neiman Marcus incursions are being investigated by attorneys general in Illinois, Connecticut and elsewhere.

Michael Fox, a spokesman for Michaels, didn’t immediately reply to phone messages seeking comment on today’s court filing.

“While we have not confirmed a compromise to our system, we believe it is in the best interest of our customers to alert them to this potential issue,” Michaels Chief Executive Officer Chuck Rubin said in a Jan. 25 statement.

Moyer asked the court to recognize a class comprising anyone who has made a Michaels purchase using a credit or debit card before Jan. 25, 2014.

The case is Moyer v. Michaels Stores, 14-cv-561, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • MIK
    (Michaels Cos Inc/The)
    • $16.68 USD
    • 0.33
    • 1.98%
  • TGT
    (Target Corp)
    • $59.3 USD
    • -0.71
    • -1.2%
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