CAR DEALERS ARE RAMPING UP LEGAL FIGHTS AFTER A MASSIVE CYBERATTACK SHUT DOWN THEIR OPERATIONS
CDK Global provides software for almost 15,000 car dealers across North America.
Software provider CDK Global has been slapped with at least eight lawsuits in federal court since a pair of cyberattacks took its dealer management service offline — and likely exposed the personal information of tens of thousands of people.
The majority of those lawsuits — which, bar one, have been filed in Illinois — were brought by people who had either worked for or used the services of one of the almost 15,000 car dealerships across North America that use CDK’s software.
Several lawsuits are seeking class-action status and accuse CDK of neglecting to properly protect their personal information from cyberattacks, which have become increasingly common. They’re requesting damages, for CDK to increase its efforts to protect personal information, and to purge all personally identifiable information (PII) related to the plaintiffs.
Before the data breach, “private information was exactly that — private,” Arizona resident Omar Aviles said in his lawsuit against CDK. “Not anymore. Now, their private information is forever exposed and unsecure.”
CDK was first hit by an attack early in the morning on June 19. That forced it to shut down its systems, which are relied on by dealerships to conduct most of their routine business. Later that evening, a second “cyber incident” occurred.
Most dealers have been have been forced to find alternative ways to conduct business over the past two weeks. CDK has said at least one major public dealer and two small groups of customers have regained access to its systems. The issues are expected to be completely resolved by late Wednesday or early Thursday.
The six largest public U.S. dealers — which include those three companies, as well as Asbury Automotive and Group 1 — will likely see a 10% drop in their second-quarter earnings because of the disruptions, according to J.P. Morgan analysts. The sixth company, Penske Automotive, has said it only uses CDK’s systems for its Premier Truck Group.
A group of smaller dealers who use CDK’s systems filed a joint lawsuit against the Illinois-based company on Sunday, accusing it of negligence, breaching its fiduciary duty, and unjust enrichment. In addition to the impact on dealers, the lawsuit notes that commission-based salespeople suffered financial damages and emotional distress.
“In sum, CDK’s failure to protect its systems has had a cascading effect, extending beyond the dealerships to the individuals whose livelihoods depend on the seamless operation of these systems,” the lawsuit states.
The plaintiffs are Florida-based Formula Sports Cars and Prestige Motor Car Imports, as well as Georgia-based Bill Holt Chevrolet of Canton and Bill Holt Chevrolet of Blue Ridge. They’re joined by two Floridian residents who purchased cars through dealers using CDK’s systems. The lawsuit is filed in the southern district of Florida.
Plus, Chicago-based Jay Kay Collision Center is suing CDK, alleging negligence and seeking class-action status. The company has been unable to order parts online or check on the status of its pending orders, causing delays, according to the June 25 complaint. The complaint notes that Jay Kay has been able to order some parts manually.
2024-07-02T16:53:45Z dg43tfdfdgfd