North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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Attorney General Josh Stein Announces $1.5M Settlement with Neiman Marcus over 2013 Data Breach

Release date: 1/8/2019

(RALEIGH) Attorney General Josh Stein today announced that The Neiman Marcus Group LLC has agreed to pay $1.5 million and implement a number of policies to resolve an investigation with 43 states and the District of Columbia into the 2013 breach of customer payment card data at 77 Neiman Marcus stores in the United States, including one in Charlotte.
 
In January 2014, Neiman Marcus disclosed that payment card data collected at certain retail stores had been compromised by an unknown third party. The states' investigation determined that approximately 370,000 payment cards – 4,114 of which were associated with North Carolina consumers – were compromised in the breach, which took place over the course of several months in 2013. At least 9,200 of the payment cards compromised in the breach were used fraudulently.
 
“Data breaches are far too common – and they have real impacts for people whose information is exposed,” said Attorney General Stein. “Organizations and companies that have access to people’s personal information must take steps to protect it. The actions Neiman Marcus will take as a result of this settlement will make its customers safer.”
 
As a result of this settlement, North Carolina will receive $36,343.11 to protect consumers in our state.
 
In addition to the monetary settlement, Neiman Marcus has agreed to a number of injunctive provisions aimed at preventing similar breaches in the future, including:

  • Complying with Payment Card Industry Data Security Standard (PCI DSS) requirements;
  • Maintaining an appropriate system to collect and monitor its network activity, and ensuring logs are regularly reviewed and monitored;
  • Maintaining working agreements with two separate, qualified Payment Card Industry forensic investigators;
  • Updating all software associated with maintaining and safeguarding personal information, and creating written plans for replacement or maintenance of software that is reaching its end-of-life or end-of-support date;
  • Implementing appropriate steps to review industry-accepted payment security technologies relevant to the company's business; and
  • Devaluing payment card information, using technologies like encryption and tokenization, to obfuscate payment card data.

Under the settlement, Neiman Marcus is also required to retain a third-party professional to conduct an information security assessment and report, and to detail any corrective actions that the company may have taken or plans to take as a result of the third-party report.
 
Please click here to view the settlement document.

Contact:

Laura Brewer (919) 716-6484
 

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