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Man loses fight against firm that suffered data breach

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A Missouri man has lost his legal battle against an online prescription processor that suffered a security breach that exposed highly sensitive subscriber information.

John Amburgy alleged that Express Scripts was negligent because it failed to adequately safeguard customer data, including names, dates of birth, social security numbers, and prescription drug histories. He argued that the breach in October 2008 that exposed an unknown number of subscribers' details put him at risk of identity theft for which he was entitled to compensation.

A federal judge late last month disagreed. For the case to go forward, he said, Amburgy had to show his alleged injury was beyond mere possibility.

"In short, plaintiff does not claim that his personal information has in fact been stolen and/or his identity compromised," US Magistrate Judge Frederick R. Buckles wrote in a decision dismissing the case. "Rather, plaintiff surmises that, as a result of the security breach, he faces an increased risk of identity theft at an unknown point in the future."

In November 2008, the company offered a $1m reward for information leading to the conviction of the group that targeted it in a cyber-extortion scam. The group provided data that in some cases included prescription information for 75 users and claimed to have data for millions more. The blackmailers threatened to make the records public unless the company paid a ransom.

Express Scripts offered free credit monitoring services, but only to users who could prove they suffered identity theft as a result of the breach.

The judge rejected Amburgy's argument that the breach put him at risk for identity theft for which he needed to spend considerable time and money to reduce. The judge also pointed out that Amburgy wasn't entitled to timely notification of the breach because Missouri had no laws mandating such disclosures.

Amburgy's lack of standing is worth remembering the next time a bank or pharmacy tries to convince you life would be easier if you moved your business online. As things stand now, a patchwork of inconsistent and often toothless laws often provides generous loopholes to companies that expose customer data.

Federal legislation that would require companies that store sensitive personal information to establish a strict data-privacy regimen has recently moved out of the Senate Judiciary Committee, but Marc Rotenberg, executive director of the Electronic Privacy Information Center, said it's unclear if it will ever make it to the floor for a vote.

"We think it's a pretty good bill, and it will fill the gaps in the states where there currently isn't security breach notification" requirements, he said. ®

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