Search My Blog

Friday, May 6, 2011

Sony Apologizes, Offers $1 Million Insurance After Hacking - Bloomberg

Sony Apologizes, Offers $1 Million Insurance After Hacking

By Cliff Edwards and Mariko Yasu - May 6, 2011 3:04 AM CT

Sony Corp. (6758) Chairman Howard Stringer apologized and offered U.S. customers of PlayStation Network and Qriocity online entertainment services a year of free identity- theft protection after the system was crippled by hackers.

Japan’s biggest consumer-electronics exporter will offer a $1 million insurance policy per user, covering legal expenses, identity-restoration costs and lost wages that occur after data is stolen, Sony said in a blog post. Austin, Texas-based Debix Inc. was hired to provide the monitoring service and similar programs for users in other countries are also being considered, it said.

The announcement follows last month’s hacking of Sony’s online entertainment and games platforms when the Tokyo-based company was criticized by U.S. lawmakers for not informing users of the breach quick enough. The shares fell to their lowest in a week in Tokyo today after Sony increased the total number of accounts that were comprised to 101.6 million.

“This is an unprecedented case of information theft in terms of the number of accounts involved,” said Nobuo Kurahashi, an analyst at Mizuho Financial Group Inc. in Tokyo. “There are lots of uncertainties including lawsuits, making it difficult to estimate the company’s overall expense.”

U.S. subscribers have until June 18 to sign up for Debix’s AllClear ID Plus protection program, said Patrick Seybold, a Sony spokesman for the video-games unit.

‘Frustrating Time’

Sony didn’t elaborate whether the program will cover identity theft that isn’t related to the mid-April breach of the PlayStation and Qriocity networks, which affected 77 million accounts. Separately, some 24.6 million users of the Sony Online Entertainment platform were also affected, the company said.

“I know this is a frustrating time for all of you,” Chief Executive Officer Stringer said in the blog post. “Let me assure you that the resources of this company have been focused on investigating the entire nature and impact of the cyber attack we’ve all experienced and on fixing it.”

Kazuo Hirai, Sony’s executive deputy president in charge of consumer products and network services, apologized May 1 for the breach and said the company aims to restore the online gaming center by the end of the month after upgrading security. Hirai and two other officials bowed in apology at a press conference in Tokyo, and said Sony can’t rule out credit card numbers and expiry dates having been stolen. The company is cooperating with authorities, including the Federal Bureau of Investigation.

Legal Backlash

Torrenzano Interview on Sony Data Breaches, May 4

Play Video

May 4 (Bloomberg) -- Richard Torrenzano, chief executive officer of the Torrenzano Group, talks about Sony Corp.'s handling of data breaches of its PlayStation Network and Sony Online units. Sony was subpoenaed by New York Attorney General Eric Schneiderman over the breaches and representations made to customers, a person familiar with the probe said. Torrenzano speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Ernst Interview on Sony Data Breach, May 3

Play Video

May 3 (Bloomberg) -- Daniel Ernst, an analyst at Hudson Square Research, discusses security breaches at Sony Corp. Sony, the maker of the PlayStation 3 video-game console, may have exposed customers to years of potential identity theft after hackers breached the company's online entertainment networks in mid-April. Ernst speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

Pachter Interview on Sony Security Breach, May 2

Play Video

May 2 (Bloomberg) -- Michael Pachter, an analyst with Wedbush Securities in Los Angeles, talks about a security breach that may have compromised the credit-card information of Sony Corp.'s clients. He speaks with Emily Chang and Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)