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1/7/2008
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Sears Data Breach Draws Lawsuit

A New Jersey resident has filed a $5 million class action lawsuit against the retailer charging breach of contract and a violation of the Consumer Fraud Act.

Following revelations that Sears' ManageMyHome.com site exposed customer purchase data to any online visitor who asked about it, a New Jersey resident has filed a $5 million class action lawsuit against the retailer.

In a complaint filed on Friday in Cook County, Ill., where Sears has its headquarters, plaintiff Christine Desantis alleges that the company's exposure of customer data represents a breach of contract and a violation of the Consumer Fraud Act.

The $5 million sought is to cover payments to affected consumers and attorneys, and the cost of injunctive relief; no individual is seeking more than $75,000, according to the legal filing.

The crux of the case is that Sears "failed to take reasonable steps to ensure that [consumers'] private information was secure," according to the complaint.

"Implicit in Sears's contracts is a good faith and fair dealing provision, requiring Sears to disclose whether and to what extent it makes publicly available customers' personal information and to take reasonable steps to insure that the private information of [customers] is not easily accessible by the public," the complaint states. "Not only does Sears fail to make such disclosures, it makes contrary disclosures on its Web site, listing the specific circumstances -- none of which are germane to the instant case -- under which Sears does share customer information with others."

The complaint also alleges that Sears' failure to promptly and prominently disclose the security breach on its Web site constitutes a violation of the Consumer Fraud Act, a claim that shows how much disclosure laws like California's SB 1386 have changed the expectations of corporations following a data breach.

A Sears spokesperson said the company does not comment on pending litigation.

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