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CDK Global faces multiple lawsuits from merchants crippled by cyberattacks
CDK Global faces at least eight lawsuits from auto dealers cyber attacks that brought down the software provider's merchant management systemhurting car dealership operations.
The plaintiffs, who are employees or customers of car dealerships that use CDK tools, allege that CDK failed to adequately protect customer data and that the personal information of tens of thousands of people was likely exposed in the hack.
Tucson, Arizona resident Omar Aviles, an employee of Asbury Automotive Group, one of CDK Global's approximately 15,000 clients, filed a proposed class action lawsuit against the Illinois-based company, alleging that it failed to protect the “litany of highly sensitive personally identifiable information” it stored about the auto dealership's past and present customers and their customers and employees.
According to the complaint, filed in Illinois district court.
On its website, CDK promotes its cybersecurity capabilities, promising to “stop cyberattacks in their tracks.”
“CDK Cybersecurity Solutions provides a three-tiered cybersecurity strategy to prevent, defend and respond to cyberattacks so you can protect your retailer,” the website states.
Social Security numbers exposed
In contrast, the suit alleges that CDK “did not have effective means to prevent, detect, stop or mitigate breaches of its systems – thus allowing cybercriminals unrestricted access to the personal data” of current and former customers. This data includes Social Security numbers, employment history, driver's license information, financial account details and more.
The security failure stems from CDK's inadequate cybersecurity training for its employees, the lawsuit alleges. As a result, Aviles “fears for his personal financial security and worries about what information was exposed in the data breach” and suffers from “anxiety, sleep disruption, stress, fear and frustration.”
The suit collection is seeking damages, as well as for CDK to better protect customer information.
“It's a disaster”
One second suit by a group of dealers including Formula Sports Cars, Prestige Motor Car Imports, Bill Holt Chevrolet of Canton, Bill Holt Chevrolet of Blue Ridge and a pair of consumers also alleges CDK was negligent in protecting its customers. “CDK has failed to live up to its promises and responsibilities it has made during its marketing campaigns to make users feel at ease,” the lawsuit states.
“It's a disaster,” said one affected merchant quoted in the lawsuit, describing the number of violations at his business. “Customers are coming in, we are selling cars but we cannot reserve the offers, cannot fund deals or take them to banks. Which means we can't finance the cars or pay off the cars,” he said.
Like sewing a wound without cleaning it
After CDK was breached the first time, it reset its systems, only to be hacked a second time. In their lawsuit, the merchants liken CDK's decision to restore systems without addressing underlying security issues to “a doctor stitching up a wound without first removing all the debris.”
“Just as an improperly cleaned wound would lead to more infections and prolonged healing, CDK's rush to restore its system led to more violations and, in turn, left car dealers with exposed to financial losses for longer periods of time,” the lawsuit states.
CDK has not indicated whether it will compensate affected retailers for any financial loss or potential exposure to identity theft as a result of the cyber attack. A spokesperson for the company did not immediately respond to CBS MoneyWatch's request for comment on the lawsuits.
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