Data Breach Escalates Privacy Concerns

NEW YORK (MainStreet) – Like many American consumers, I received emails from a few retailers last week informing me that my email address may have been stolen as a result of a massive data breach. Target (Stock Quote: TGT), for instance, sent me an email saying that “Target’s email service provider, Epsilon, recently informed us that their data system was exposed to unauthorized entry.”

Walgreens (Stock Quote: WAG) sent me a similar email, saying “On March 30th, we were informed by Epsilon, a company we use to send emails to our customers, that files containing the email addresses of some Walgreens customers were accessed without authorization.”

Like many Americans, I had two questions: What does this breach mean for my privacy? And who are these Epsilon people that retailers have given my email address to?

The answer to the first question is somewhat comforting. For now it seems that only email addresses and names were leaked as part of the breach, which means that the only real fallout from the breach will likely be increased spam and phishing attempts. As long as you’re vigilant about not giving out personal information to emailers purporting to be retailers or financial institutions, there’s likely little concern that this could precipitate widespread identity theft.

But the answer to that second question is a bit more complicated.

As Walgreens’ and Target’s emails say, Epsilon is an email service provider contracted by the retailers to handle their mass marketing duties; Chase (Stock Quote: JPM), which was likewise involved in the breach, described the company as simply “a vendor we use to send emails.”

But as the laundry list of huge retailers and banks contracted with Epsilon might indicate, this is not just another email marketer. In a press release finally apologizing for the breach on Wednesday, Epsilon’s parent company Alliance Data describes itself as “North America's largest and most comprehensive provider of transaction-based, data-driven marketing and loyalty solutions serving large, consumer-based industries.”