Dozens Join Lawsuit Over Wendy’s Data Breach

The class-action lawsuit filed against Wendy’s over a data breach at more than 1,000 restaurantshas attracted a crowd.

More than 20 credit unions across the country, from Alaska to Florida, and a handful of creditunion associations, including the Credit Union National Association, have joined as parties to thesuit filed in Federal Court earlier this year by First Choice Federal Credit Union of westernPennsylvania.

Of the credit unions joining the suit, three are in Ohio, including Gahanna-based KembaFinancial Credit Union. Kemba declined to comment.

Wendy’s admitted payment systems at some of its franchised stores were compromised betweenOctober and June. The company released a list of more than 1,000 stores across the U.S., includingabout 20 in central Ohio, where malware was discovered during an investigation.

The lawsuit alleges that Wendy’s knew its systems were vulnerable and did little to address theproblems. The credit unions cite several former Wendy’s employees, including a pair of unnamedcomputer system engineers, who allege the company failed to prioritize data security even whenissues were brought to management.

The credit unions allege that the data breach has caused a months-long surge of credit and debitcard replacements and millions of dollars in fraudulent charges. The breach, which affected onlyfranchised stores, not those owned by the company, has been called one of largest ever in historyby the president of the National Association of Federal Credit Unions — larger even than recentbreaches at Target and Home Depot which affected millions of consumers.

Wendy’s has yet to answer the complaint in the suit and has filed for additional time toformulate its response. The Dublin-based company said it does not comment on ongoing litigation,but added that the data breach investigation remains open.

“We continue to work with the payment card brands, law enforcement and forensic investigators,”said Bob Bertini, Wendy’s spokesman, “and we have removed detected malware from the affectedsystems.”

The credit unions did not specify a dollar amount of damages being sought in the suit. But inaddition to monetary damages, the institutions seek improvements of Wendy’s payment systems such asadding chip readers, more-secure data holding procedures, and more-secure point-of-sale systems inrestaurants.

The chip technology helps protect people who use debit cards. Thieves are targeting debit cardsnow that credit card companies like Visa and Mastercard are better at detecting fraud. Many debitcard issuers are smaller banks and credit unions that are less sophisticated than major credit cardcompanies.

A status conference on the case is scheduled for September.

Source: www.dispatch.com www.dispatch.com

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