Recovering Your Financial Losses from the CDK Data Breach

By Scott A. Koman, CPA, CVA, CFE, MAFF

As a CDK dealer, the period from June 19 through early July may have felt like a perpetual nightmare. You relied on CDK to protect your confidential information and to keep your business running—handling everything from sales and repairs to financing and general office operations.

During the outage, your dealership may have suffered significant financial losses. A study has already been conducted that estimates total direct losses to franchised auto dealers exceeds $1 billion in the three calendar weeks that CDK systems were down.^[1]   However, the damages you experienced may extend far beyond lost profits related to sales lost, including costs incurred to mitigate those lost profits.

The impact of the breach could even reach beyond the outage period. According to CDK, “Failure to put sufficient safeguards in place could cause considerable damage to your dealership’s financial future and your customer’s confidence in you. Our research shows 84% of consumers said they would not go back to a dealership after their data had been compromised.”^[2]  

What Can You Do to Recover Your Financial Losses?

You have options: submitting an insurance claim, pursuing litigation, or both. Your attorney can guide you on the best course of action. Regardless of the path you choose, accurately calculating your financial losses is critical—and complex. Understanding the dealership industry and the intricacies of loss calculation is essential.

Boyer & Ritter offers unparalleled expertise, serving over 400 dealerships and possessing extensive experience in calculating financial losses. We can assist you with:

• Litigation Support: Helping clients seeking damages in court.
• Insurance Claims: Assisting claimants in preparing and defending claims.

Additionally, we have assisted insurance companies in verifying or rebutting claims, which gives us a unique understanding of what insurers are looking for.

As you work to recover your financial losses related to the CDK breach, Boyer & Ritter can be an essential partner on your team.

Disclaimer: The information provided is for general guidance and is not legal advice. For legal advice, please contact an attorney.

_{[1] https://www.freep.com/story/money/cars/2024/07/15/cdk-cyberattack-cost-car-dealerships/74408247007/}

_{[2] https://www.cdkglobal.com/insights/data-privacy-what-you-should-know}