After Best Buy Fires Outside Vendor, Customer E-mail Addresses Are Stolen

It's bad enough when one of a retailer's current outside vendors suffers a breach that lets thieves steal customer information. But on April 22, Best Buy learned that a former vendor had held onto Best Buy customer E-mail addresses, which were subsequently "accessed without authorization"—presumably to use for phishing expeditions.

Best Buy won't say who the vendor is (except that it's not Epsilon or Best Buy's current lead E-mail marketing provider, ExactTarget), how many customers were exposed in the breach or how long ago the vendor was fired—just that the chain is taking legal action. But the situation is one that should make every retailer nervous. It's almost impossible to know for sure that an outside vendor has destroyed all copies of customer data once a business relationship ends. After all, that's extra work to put in for a client who's not going to be paying for it.

For once, the almost complete lack of information about the outside vendor is understandable. Best Buy hasn't yet sued the vendor, and the retailer may be able to squeeze out a better settlement if the vendor's name isn't made public. Aside from that, there's no reason for Best Buy not to talk about the incident, because Best Buy "ended its relationship with the involved third-party vendor prior to this situation as part of a strategic business decision unrelated to data security," according to a spokesperson.

According to a letter sent to some customers and signed by Best Buy Chief Marketing Officer Barry Judge, "We believe the only information taken was your E-mail address, and that no other information was accessed. We do not believe that Best Buy was specifically targeted in this breach."

OK, let's assume Judge is right, and it was a random breach that happened to scoop up Best Buy customer data that wasn't supposed to be there. Still, it would be nice to know exactly what happened. Did the vendor simply leave Best Buy's customer list in its databases after the chain fired the vendor? How long has it been sitting there? Was it accessed by thieves who broke in or by a crooked employee—or by a soon-to-be-laid-off employee whose job was eliminated because the vendor lost the Best Buy account?

Or was the customer data on a stolen backup tape, thumb drive, hard disk or laptop? Had some software developer taken the data home to test an application and never deleted it? Did the E-mail addresses become raw material for marketing statistics and then survive after the report was done?

Chasing down and purging every shred of a client's data isn't a simple job. If that data isn't locked down from day 1, it's just far too easy for data to percolate throughout many organizations. And the harder it is, the more expensive the job is—an expense that the vendor will have to eat, because the client has already closed his checkbook.

Maybe the right answer is to require a vendor to lock all data down from the beginning—and maybe even audit the vendor to make sure that's done. Such a step won't prevent a truly sloppy vendor from letting thieves in or letting data leak out. But at least a retailer can ask where all the data is supposed to be, and demand that it be wiped when the business deal ends.

Otherwise, there's no way of knowing how long you'll be at risk from a third party you thought you were done with.