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The June cyberattack of CDK, the company that provides financial services to car dealers, crippled both the company and thousands of dealers across the country. Now dealers and other businesses that relied on the company are suing claiming, CDK was negligent.
Automotive News reports that Manderbach Ford in Hamburg, Pensilvania, broker DLR Auto Group in Agoura Hills, California, Smith Collision Center in Ada, Oklahoma, and Broadway Precision Collision in Ada, Oklahoma came together to file a class action suit against CDK on July 12th. According to Auto News, the group wants CDK to be held responsible for the cyberattack.
This action arises out of Defendant CDK Global’s failure to maintain adequate data security measures, which led to the foreseeable event of a data breach followed by the foreseeable injuries inflicted on the many automotive businesses that rely on CDK Global’s dealer management system,” the latest lawsuit stated.
The group is mainly suing over a loss of business. Auto News says data estimates that in the three and a half weeks between when the attack began on June 19th and the apparent end on July 15th, over $1 billion and 56,200 new vehicle sales were lost. The attack had different impacts on each business. Manderbach Ford described how they had to go back to pen and paper for transactions for instance.
Manderbach Ford was unable to cut checks through the CDK system, and had to resort to using pen and paper to process sales. It was also unable to access certain rebates and incentives being offered, which further cut into potential sales. Scheduling for vehicle service was also disrupted.
DLR Auto Group claims that it couldn’t conduct business for the three weeks CDK was under attack.
Auto News says the class action is one of 10 that have been filed against CDK in recent weeks by dealers and automotive businesses who all claim to have lost business because of the attack. The attack ended when CDK allegedly paid the attackers a $25 million ransom.