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Michaels Stores Hit with Second Class Action Lawsuit

By Kimberly Mirando


Michaels StoresMichaels Stores, Inc. has been hit with a second class action lawsuit stemming from its disclosure that its checkout-line PIN pads were tampered with in 20 states. Both class action lawsuits allege that the arts and crafts retailer failed to safeguard shoppers’ credit and debit card information and PIN numbers, and failed to properly warn them of the data breach.

The latest Michaels Stores class action lawsuit was filed last Friday in U.S. District Court in the Northern District of Illinois by Plaintiff Mary Allen, who said an $18.16 purchase at a Michaels store on March 15 led to more than $1,000 in unauthorized transactions.

“Plaintiff swiped her debit card through one of the tampered Michaels PIN pads and unwittingly had her debit card information and PIN number stolen as a result,” the class action lawsuit said.

Allen discovered her debit card account numbers had been stolen when her bank de-activated her card due to suspicious activity. An account record showed two unauthorized transactions around May 4 for $503 each. Allen says she never received any alert from Michaels about the data breach, which occurred between February 8 and May 6, 2011. About 90 PIN pads at various Michaels stores throughout the country showed signs of tampering.

The Michaels data breach class action lawsuit says Michaels failed to ensure the physical security of its checkout line terminals and test its payment processing equipment to protect customer data. It also says Michaels sent a “belated” email alert to some customers, and failed to alert all customers of the data breach.

“Michaels’ email alert failed to provide timely and clear notification to anyone, thereby preventing customers from taking meaningful, proactive steps to secure their financial data and bank accounts,” the class action lawsuit said.

Allen’s Michaels data breach lawsuit is seeking class action status for any U.S. resident who made a purchase at a Michaels store nationwide using a debit or credit card swiped through a PIN pad beginning January 1, 2011. It alleges violation of the Federal Stored Communications Act and the Illinois Consumer Fraud and Deceptive Practices Act. It also alleges negligence. The plaintiff is seeking a jury trial.


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Updated June 3rd, 2011


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