Credit card companies don't have to notify customers their personal information has been stolen, a California Judge ruled today.

The Rothken law firm in Marin County, Ca had brought a class action suit on behalf of cardholders and merchants against CardSystems Solutions, Visa and MasterCard following a high profile data ID heist in June. [PDF, 200kb (http://www.techfirm.com/cardsystems.pdf)]

The suit accused the defendents of violating California state law by failing to notify them that personal data had been viewed by hackers, or the data obtained by the intruders.

In June, CardSystems admitted intruders had compromised the confidentiality of 40 million credit card holders, and 200,000 records had left the network. CardSystems had refused to notify the card holders. The Rothken suit also requested that chargeback fees or penalties on hapless card holders who were the victims of ID theft should be waived.

But a San Francisco Superior Court Judge, Richard Kramer, disagreed. "I don't see the emergency," he said. "I don't think there is an immediate threat of irreparable injury" to consumers.

Visa and MasterCard argued that because their relationship is with the issuing banks, not the customers, they don't have to notify the victims.

The Californian disclosure law (http://www.theregister.co.uk/2003/01/07/california_disclosure_law_has_national/), passed in January 2003 and a template for disclosure legislation in other states, says that consumers should be notified in the case of ID theft, although it's riddled with loopholes.

The effects of online security fears are already being felt. Analyst firm Gartner Group has revised its 2005 ecommerce prediction downwards (http://www.theregister.co.uk/2005/06/23/ecommerce_decline/) this year after 42 per cent of consumers said they were spending less online because of security fears. Some 14 per cent have stopped paying bills online altogether. ®

Related stories

Hacked to the TK Maxx (19 January 2007)
http://www.theregister.co.uk/2007/01/19/tjx_hack_alert/
FTC settles with CardSystems over data breach (27 February 2006)
http://www.theregister.co.uk/2006/02/27/ftc_settles_with_cardsystems/
BT flogs ID theft insurance (21 February 2006)
http://www.theregister.co.uk/2006/02/21/bt_id_theft/
FTC backs consumer security quiz (13 January 2006)
http://www.theregister.co.uk/2006/01/13/ftc_security_quiz/
Millions of UK households at risk of ID theft (17 October 2005)
http://www.theregister.co.uk/2005/10/17/id_theft_prevention_week/
Man with 130 IDs steals £1m (11 October 2005)
http://www.theregister.co.uk/2005/10/11/bank_scam_gang_jailed/
US banks lose $50bn to phantom fraudsters (16 September 2005)
http://www.theregister.co.uk/2005/09/16/gartner_phantom_fraud/
Hi-tech no panacea for ID theft woes (5 September 2005)
http://www.theregister.co.uk/2005/09/05/hi-tech_id_theft_cure_fallacy/
ID theft automated using keylogger Trojan (9 August 2005)
http://www.theregister.co.uk/2005/08/09/key_log_scan/
ID theft fears prompt ecommerce boycott (21 July 2005)
http://www.theregister.co.uk/2005/07/21/id_theft_ecommerce_survey/
The Sun exposes UK ID theft racket at Indian call centre (23 June 2005)
http://www.theregister.co.uk/2005/06/23/indian_call_centre_fraud_probe/
California aims to close loophole in state ID theft law (22 June 2005)
http://www.theregister.co.uk/2005/06/22/california_id_theft_law_update/
MasterCard fingers partner in 40m card security breach (18 June 2005)
http://www.theregister.co.uk/2005/06/18/mastercard_breach/
Citibank admits: we've lost the backup tape (7 June 2005)
http://www.theregister.co.uk/2005/06/07/citigroup_lost_tape/
US bank staff 'sold customer details' (24 May 2005)
http://www.theregister.co.uk/2005/05/24/us_banks_security_flap/
It's official: ChoicePoint, LexisNexis rooted many times (14 April 2005)
http://www.theregister.co.uk/2005/04/14/privacy_invasion_is_good_for_you/
LexisNexis data breach far worse than reported (13 April 2005)
http://www.theregister.co.uk/2005/04/13/lexis_nexis_loses_more_data/
Online fraud could dent economies (18 February 2005)
http://www.theregister.co.uk/2005/02/18/fraud_threat_warning/