Morgan Stanley is at the center of a hallmark case in the ITAD industry. The financial giant switched ITAD providers in 2016 to save on costs and this eventually led to significant data loss for their customers. In 2020, Morgan Stanley alerted their customers that their data was mismanaged and potentially compromised, which has led to lawsuits in what would become a flashpoint for the ITAD industry.
What exactly happened?
Morgan Stanley terminated contract with ITAD provider: Morgan Stanley chose to switch providers from an experienced ITAD provider to another company that did not specialize in ITAD services to save on costs associated with disposition. This led to poor practices and lack of sanitization of data-bearing devices and the eventual loss of customer data.
Class action lawsuit: After Morgan Stanley alerted their customers about the data loss, numerous class-action lawsuits followed, and the financial giant is still in legal trouble. Many lawsuits are claiming that the company was negligent in protecting the personally identifiable information of their customers and there are significant threats regarding the safety of customers. A few of the cases have been settled, but more are still ongoing.
$60 million fine: The federal government fined Morgan Stanley $60 million for the mismanagement of customer data. The treasury department detailed the fine and Morgan Stanley is still doing legal work to ensure this doesn’t occur again.
How can your company prevent this?
Work with the right ITAD provider: There’s a seemingly endless amount of ITAD providers to choose from but choosing the right provider can make or break your business. Morgan Stanley took a shortcut by working with a provider that offered them a low quote for the services required. This resulted in data being mismanaged during the recycling process and a costly class-action lawsuit. ITAD companies ensure that the disposition process is both secure and compliant. Forgoing this can result in an array of legal and environmental consequences for your business.
Follow the best practices for ITAD: One of the key points that was raised in the case against Morgan Stanley was that it didn’t follow the best ITAD practices, and this directly led to the loss of data. Your provider should work with you in order to create a program that works for you while avoiding issues such as these. Trying to cut corners can result in additional future work and legal ramifications.
Don’t settle for an ITAD provider based on your location: Morgan Stanley chose to switch ITAD providers to a provider that was in the same city they were. Although this resulted in temporary convenience, it led to significant issues for them. A competent ITAD provider will have nationwide logistics to support your ITAD process. Sage offers all ITAD customers with nationwide logistics for security and convenience. This can be done easily by using an online form to request a pickup.
To learn more about how to avoid ITAD failures, check out Sage’s ITAD managed services here.