First lawsuit against PlayStation filed as users report credit card fraud

The fallout from PSN's security breach continues, as a lawsuit is filed and subscribers report credit card fraud.

It was bound to happen: Sony is being sued for the security breach of its PSN network and subsequent loss of user data, including credit card information. California-based Rothken Law Firm has filed suit on behalf of Alabama PSN subscriber Kristopher Johns as well as all other users hit by the fallout. The firm specializes in class action, civil litigation, and high technology law.

“This action is brought on behalf of plaintiff individually, as representative of the common or general interest and as class representatives for all other similarly situated nationwide against Sony to redress the defendant’s breach of warranty, negligent data security, violations of consumers’ rights of privacy, failure to protect those rights, and failure and on-going refusal to timely inform consumers of unauthorized third party access to their credit card account and other nonpublic and private financial information,” the lawsuit states. It also addresses users’ inability to access the network they were paying for and seeks undisclosed monetary damages, but does specify that the paintiff(s) expect some sort of redress for “defective” PlayStation consoles and PSN and Qriocity services, as well as all legal fees and credit report monitoring covered.

While the lawsuit accuses Sony of generally lax security measures, it largely takes issue with the company’s inability to keep users in the loop. It argues that Sony was well aware of the hack’s consequences but failed to inform subscribers, which did not allow them “to make an informed decision as to whether to change credit card number, close exposed accounts, check their credit reports, or take other mitigating actions.”

Sony’s PSN and Qriocity services were first hit by the outage April 17, and Sony admitted later that week that it was due to “external forces.” Only yesterday, April 26, did it admit user data has been stolen, including credit card information. PlayStation users are feeling the effects: Ars Technica reports that various readers have fallen victim to credit card theft because of the massive security breach, which some are saying is of unforeseen proportions.

It is undeniably clear that Sony is at fault here and that millions of subscribers deserve at least some sort of compensation, but analyst Michael Pachter says it could be hard to prove. Speaking with IndustryGamers, Pachter says “It’s really hard to show damages. How much does it cost you to have your identity stolen? Especially if you can’t prove that it was used for any purpose whatsoever? Pain and suffering? Not appropriate for a class action [lawsuit], so the amount of the settlement would be very small, if anything at all.”