McDonald's, Walgreens Learn Joys Of Third-Party E-Mail Breaches

McDonald's and Walgreens both learned this week the downsides of outsourcing E-mail marketing campaigns when their E-mail systems were breached, sending the personal information of customers of both chains into the cyber criminal world.

A key takeaway from these attacks is that retailers are becoming increasingly at risk for data losses from systems they can't control. This goes beyond E-mail campaigns and includes a wide range of mobile programs, in addition to social site campaigns.

Given the way the two chains handle their E-mail data, different levels of personally identifiable information from their customers was stolen. McDonalds was using an E-mail firm, hired by a unit of the Leo Burnett advertising agency called Arc Worldwide. The E-mail firm has not yet been publicly identified. Walgreens is not saying how its E-mail was accessed, but while Walgreens spokesperson Michael Polzin confirmed that his chain works with Leo Burnett, he said that the E-mail was not through the same firm that lost McDonald's data. He wouldn't say where or how it had been handled.

McDonald's sent an E-mail to customers this weekend that information provided to McDonald's through a promotion "was improperly accessed by an unauthorized third party." The McDonald's Web site added: "Unfortunately, a third party was able to defeat the security measures put in place by the E-mail database management firm to protect the information you provided to us."

That E-mail also described what was taken: "McDonald's does not collect sensitive financial information, such as Social Security Numbers or credit card numbers online or through E-mail. As such, the information improperly accessed did not include this type of information. Rather, the limited information you provided to McDonald's included information required to confirm your age, a method to contact you (such as name, mobile phone number, and postal address and/or E-mail address) and other general preference information."

On its site, McDonald's added a few more details: "The information contained in the database is limited to your E-mail address and potentially also your name, postal address, home or cell phone number, birth date, gender and certain information about your promotional preferences or Web information interests. This is information you provided when you signed up or subscribed. The database did not contain Social Security Numbers, credit card numbers or any sensitive financial information, since McDonald's did not collect this information."

A statement from Walgreens indicated the data hacked from it was much more limited."We recently became aware of unauthorized access to an E-mail list of customers who receive special offers and newsletters from us. Customer passwords, account information, prescription and any other personally identifiable information were not at risk because such data is not contained in the E-mail system, and no access was gained to Walgreens consumer data systems," the Walgreens statement said. "Although only E-mail addresses were obtained, we believe it is important to inform our customers that, as a result, they may have received spam E-mail messages asking them to go to another Web site and enter personal data. Online security experts have reported an increase in attacks on E-mail systems and, therefore, we have voluntarily contacted the appropriate authorities and are working with them regarding this incident."

Such third-party marketing data breaches likely to become much more frequent in 2011, but consumers generally do not care about third-party vendors. If they give information to McDonald's or Walgreens and the data gets stolen, they're going to blame McDonald's and Walgreens. And both chains have made matters worse by protecting the identity of that E-mail firm. If there was any chance of placing the blame on the company that was actually breached, that chance vanished when the chains agreed to protect that E-mail firm's reputation instead of their own.

Maybe McDonald's should bring back and modify a favored tagline from years back: "You Don't Deserve A Break-In Today." At which point, the protected E-mail firm might reply: "I'm Lovin' It."

One media report—it was from MSNBC—added a little confusion to the Walgreens breach by flagging that Walgreens retained the E-mail addresses of consumers who had opted out, as though that was an ethical violation. In fairness, that's a common procedure by E-mail firms and it's actually an anti-spam tactic. To try and minimize unauthorized mail to people, it prevents someone from resubscribing a consumer who has opted out of that E-mail program. (That's a popular tactic among spammers.) The only way to prevent unsubscribed consumers from being added back onto the mailing list is to retain a copy of those unsubscribed consumers and treating those address files as a "do not allow any of these E-mail addresses to be entered into the mailing list" list.