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Data Breach Hits Canada's Club Monaco

By Martin H. Bosworth
ConsumerAffairs.com

January 30, 2007

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The U.S. doesn't enjoy a monopoly on data breaches and credit card hacks. Canadian authorities are investigating a possible breach of consumer data held by swanky fashion retailer Club Monaco.

The retailer was alerted to the breach of information late last year by a third-party payment processor, which was not identified.

The Royal Canadian Mounted Police (RCMP) were not brought in directly by Club Monaco, but rather from a tip delivered to the Vancouver police department.

Club Monaco quickly hired an outside forensic firm to assist the RCMP in the breach investigation, the details of which remain scant. As usual in such cases, Club Monaco claimed the incident showed no evidence of a full breach as of yet.

Club Monaco caters to the high-end fashion buyer, with 80 stores worldwide, 28 of which are in Canada. The chain was bought by the Ralph Lauren business group in 1999.

The Club Monaco breach notification came on the heels of news of credit card data breaches in the Winners and HomeSense retail chains.

The chains are part of the TJX company, along with T.J. Maxx and Marshalls, which was hit with a massive hack of credit card information in mid-January, leading to national scrutiny and instances of fraud all over the world.

The TJ Maxx breach has led banks such as Bank of America to cancel and reissue thousands of cards for its members to prevent fraud. TJX was hit with a class action lawsuit for failing to provide adequate data security for the information it was collecting.

The Canadian privacy breaches have prompted the government's Privacy Commissioner, Jennifer Stoddart, to push for legislation mandating disclosure of data breaches by companies when they occur.

Under current Canadian law, companies are not required to notify anyone if a breach takes place.

Just as in the United States, Canadian consumer advocates and watchdog organizations advocate disclosure laws as a means to keep the public informed and aware of possible damage to their identities.

Business groups oppose new disclosure laws, saying they will cost too much to implement and may numb consumers to the dangers of data breaches through "too much information."

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