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Mass e-mail breach: Just how bad is it?

By David Goldman, staff writer


NEW YORK (CNNMoney) -- It seems like every day for the past week, another dozen major companies have come out and said that they too have been affected by the massive data breach at e-mail marketing firm Epsilon.

Verizon (VZ, Fortune 500), Ritz Carlton, JCrew, Ann Taylor (ANN) and Victoria's Secret were among the most recent companies to tell customers that their e-mail addresses had ended up in the wrong hands.

The strange thing is that Epsilon, which manages customer databases and e-mail marketing for about 2,500 companies, announced the breach on March 31 -- a week ago. So why are companies still coming out of the woodwork a week later?

"We wanted to make sure we had the most detailed information possible from Epsilon," a Verizon spokesman said of his company's decision to wait until late Tuesday to send a message to its customers about the data theft. "With such a sensitive topic as personal information security, we wanted to get the information exactly right."

"It was necessary to take some time to fully understand the extent of the issue," said a Ritz Carleton spokeswoman. "Once we knew how this impacted our customers, we carefully crafted the appropriate communication."

Several other companies that notified their customers in the past day or two declined to comment. Epsilon also declined to discuss the incident.

It's understandable that companies would want to be very clear about what exactly is at stake for their customers: "Massive data breach" sounds scary.

But this one is pretty limited in scope. Epsilon said last week that an "unauthorized entry into Epsilon's e-mail system" exposed e-mail addresses and some customer names from around 2% of its clients.

The main danger that poses is the potential of increased spam and phishing attacks.

Spam sucks, but it's the modern equivalent of junk mail -- an annoying, but mostly benign fact of life.

The more hazardous threat is an increase in phishing attacks. Those fraudulent e-mails try to draw in in unsuspecting consumers by posing as messages from their bank, credit card company or telecom provider.

Phishing e-mails tend to tell recipients that their accounts have been blocked, and that they need to enter their account information to unblock them. But it's not Citibank or Macy's collecting that account information -- it's cyber criminals.

To avoid phishing attacks, customers should know that companies almost never request personal information in e-mail form. Suspicious e-mails should simply be deleted.

Meanwhile, expect those "your e-mail address has been compromised" messages to keep coming.

The laundry list of companies whose customer lists have been attacked is still growing. Ameriprise Financial, Hilton, Marriott, Chase, Target, Bebe, Eddie Bauer, TiVo, New York & Co., The McKinsey Quarterly, Lacoste, 1800-Flowers, Barclay's Financial, Best Buy, Walgreens, TD Waterhouse, Soccer.com, Beachbody, College Board, Citi, Brookstone, and AT&T Universal Citi Card have all reported that they were affected. To top of page

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