Sony’s PSN Gets Hacked ( Bad PR)

The Situation:

Unfortunately for Sony and it’s users, the Sony Playstation Network was taken down just before Easter this year. The Playstation Network or, PSN, is a network on their console gaming system that allows users to buy games, movies, play games with other users online and a whole host of other things.

At first, Sony did not come out and say what the issue was and why the network was taken down. It then came to light that their network was hacked. As a response to Sony hassling and suing another “hacker” for jailbreaking the PS3, some rogue hackers from the group “Anonymous” hacked the PSN and was able to retrieve names, addresses, phone numbers, usernames, passwords, birth dates and even credit card numbers. Also, the PSN hack has affected more than 70 million users.

This details of the hack and the reason why they took the PSN down were officially released by Sony over a week later on their blog.

The PR Angle:

One of the biggest mistakes that Sony made was that they waited over a week to announce why the network went down. In that time, people could have alerted their credit card companies and canceled credit cards. In Sony’s defense, they stated that they had gotten help from a security team to help figure out what had happened and then took all the information they got and shaped it into a presentable format. They said as soon as they had everything they needed, they released the information. In the world of PR, waiting that long to release information that could affect people’s credit and identity is simply not an option.

Also, it was discovered that Sony was keeping users information on the servers in plain text. It was not encrypted in any way. The credit card information was hashed so it would be difficult for hackers to get the numbers, but they are still technically retrievable. As far as the names, usernames, emails and all of the other relevant information, anyone with access can read all the information the same as you’re reading this.

Another point is how they decided to finally release the information that they found. They didn’t hold a press conference, they didn’t immediately email users, they decided to write a post on the Sony PSN blog. If you didn’t know that there was a blog or that the PSN was even hacked, you would never even think to check there and you would maybe never know that your private information was in the hands of malicious hackers.

Lastly, the cherry on the top comes from Sony’s second-rate apology. They did say that they were sorry and are offering some free things to its users. The greatest thing is that they are paying for and giving every user an insurance policy that insures credit fraud up to 1 million dollars. The slap in the face though is the poor choice of tangible freebies. Users are able to choose two games from a pot of four that either came out a very long time ago and are probably already owned by most users, or games that do not have any real value. Also, users are able to choose from a select few movies to rent for free.  Another thing users were given was a free one month subscription to Playstation Plus.

Even though the hack took place about a month ago, I still feel it is relevant and that people should know about it because Sony’s online networks are actually still being hacked. After the major PSN hack, other Sony online properties started to go down. Like Sony Online Entertainment, which is the PC side of its online gaming market, and also some of its online music properties, the services were hacked and user’s information was stolen. After adding on those hacks to the original one on the PSN, the affected users count reaches above 140 million.

Guaranteed, Sony has lost many users and even consumers who were thinking about purchasing a PS3 are now turned off from that idea. With their half-baked sorry and their lousy selection of free gifts, who would go back or trust them now? If you’re a PSN user, are you going to go back to using your PS3 or are you going to sell it on eBay or Craigslist? Leave your comments below.

PSN FAQ – Restoration Questions Answered (May 16)

Kazuo Hirai: PlayStation Network Restoration Announcement

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Groupon Super Bowl Commercials (Bad PR?)

The Situation:

Big social coupon company Groupon is a small upstart that has quickly grown to be a big part of social coupons and a way for people to get great deals on daily products and services.

As stated by one of Groupon’s representatives in a blog post, the people at Groupon resisted using TV commercials for two years because they didn’t believe that they were worth the money and that they didn’t work very well. During the Super Bowl though, they released their first TV commercials.

The series of commercials unfortunately exploit bad things going on in the world, like the oppression of the Tibetan people, deforestation and the dwindling numbers of the whale population to make their TV spots successful. How did people react to the commercials?

The PR Angle:

Many people ended up being very offended by what Groupon did with its commercials. Exploiting others’ misery for your gain is not a good idea. Also, after doing some research, I could not find an instance where anyone from Groupon apologized for its misstep. After such a backlash from the public, making an apology would be a great thing for them to do. What they have said is that their commercials bring to light the atrocities going on in other countries. Like anyone believed for a second that that was their intention.

On the other hand, the people at Groupon are doing something good to make up for their lapse of judgment. They have set up ways for people to donate to the causes that were talked about in the commercials. They even say that Groupon will match donations up to $100,000 for the three featured charities.

“You can view the already aired commercials, as well as new ones as we release them, at SaveTheMoney.org. And if you’ve saved enough money for yourself and feel like saving something else, you can donate to mission-driven organizations that are doing great work for the causes featured in our PSA parodies. If you guys pony up, Groupon will contribute matching donations of up to $100,000 for three featured charities – Rainforest Action Network, buildOn, and the Tibet Fund — and Groupon credit of up to $100,000 for contributions made to Greenpeace.”

Check out a couple of the commercials I’ve posted here and let me know how you feel about them in the comments below.

Groupon Source

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Abuse Among New Orleans Police (Bad PR)

The Situation:

Reported by CNN, a federal investigation found that officers at the New Orleans Police Department had been engaged in much wrongdoing and misconduct that violates the Constitution and federal law. The police were found to have used excessive force, made unconstitutional stops and searches and illegally profiled based on race, ethnicity and sexual orientation.

“Many of the New Orleans officers carry out their jobs well, unfortunately, our conclusions reveal that many New Orleans police officers have failed to live up to what we rightfully expect from our law enforcement people,” said U.S. Deputy Attorney General James Cole.

The report also explains that there were other things that happened in the past that showed that officers from the department engaged in illegal activity. Including a failed cover-up of a shooting of 2 individuals after Hurricane Katrina came to New Orleans.

“They also found that officers did not know the law regarding legal stops, searches and arrests. The system at the police department favored quantity of arrests over quality,” said Thomas E. Perez, assistant attorney general for the Civil Rights Division.

“Investigators also found regular harassment of lesbian, gay, bisexual and transgender individuals,” Perez said.

The PR Angle:

What a horrible situation for the New Orleans Police Department. Citizens finding out that the police were engaged in so much illegal activity is horrible for the department’s image and also the city’s overall image.

It will take a while for people to trust the police in that city again. There are though, some things that the city can do to help remedy the situation.

1. High-ranking officials must make a great public apology
2. Find out, through investigation, who did what and when and then have their position with the police department terminated without pay and without any retirement compensation.
3. Since it was found that most of the officers didn’t know the laws regarding a lot of common things that police deal with on a daily basis, mandatory classes must be imposed on the officers and they must test in the top percentile to pass the class.
4. Officers must also attend lesbian, gay, bisexual, transgender and race tolerance classes and/or meetings. This is because even though the people who committed the atrocities would be terminated, there could be others that have negative feelings towards these groups but never did anything
5. Every six months the progress of the department must be investigated and reported on
6. All of these things must be done publicly so that the citizens of New Orleans know that steps are being taken to make things better

The New Orleans Police Department has a lot of work to do.

Original CNN Article

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Clearwire Customers Upset Over Broken Promises (Bad PR)

The situation:

Yesterday March 10, it was reported that Clearwire, one of the top internet service providers in the U.S., may have been engaging in exactly what it promised it wouldn’t do, and then some. 15 of the company’s customers have filed a lawsuit against Clearwire because they have not been providing the “high-speed internet” service they had promised. They are also charging customers early termination fees because they canceled their contracts due to unhappiness with the service. It is also said that Clearwire might be involved in a scheme that pulls in new customers that their network can’t support by promising services and not delivering on them.  They would be doing this in order to get more money to build up their infrastructure in the future.

In some cases customers were being throttled down to 256Kbps and were told that it was due to bandwidth caps, while others were told that bandwidth shaping was done only at certain parts of the day. Clearwire is now being accused of violating advertising and fair trade practices. The company’s transparency on what they can guarantee is putting them into big trouble.

The PR angle:

These accusations do not bode well for Clearwire. If the basis of the complaints end up being true, Clearwire will have been found lying to, and intentionally misleading  their present and future customers and violating advertising and fair trade practices.

Clearwire will have broken one of the cardinal rules for maintaining good and ethical PR by lying to its customers. It’s integrity will have been sacrificed for an attempted short-term gain. Companies need to take note that if you can’t provide exactly what you’re offering, then say so. If you don’t have it, you don’t have it. Lying to your customers to get more money will eventually hurt you in the long run. Potential customers will see Clearwire as an untrustworthy company and will avoid signing up with them in fear that they won’t get what they signed up for. That is of course if those people even have more than one choice of ISP in their area. Which is a whole other story.

Again, if the allegations againts Clearwire are true, they should have just either admitted that they would have to slow down everyone’s speed in order to add more customers or just not add more customers at all. Clearing the early termination fee for customers wanting to leave would be a great way to start pleasing the critics.

We will have to wait and see how Clearwire reacts to these accusations and if they will try to mend any potential wrongdoing.

Source Article

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Verifone Calls Out Square (Bad PR)

The situation:

Square and Verifone have been in the news lately and it’s been making many people think twice about mobile credit card payments. Square is a start-up company that had a great idea to develop a credit card scanner that plugs into the headphone jack of a mobile phone. Verifone, who’s widely known for their credit card processing systems, called Square out Wednesday, March 9, and accused them of putting out a product that can and is being used to steal credit card numbers.

Verifone is concerned about the lack of encryption when scanning the card and how the data is transferred to the phone. It works similar to other credit card scanners where you input an amount, scan the card and then the transaction goes through. The part where there is no encryption is during the time the data is taken from the card and put into the phone for the transaction. This is much like the situation when you are at a restaurant and the waiter or waitress disappears with your card and then brings it back. During that time, the waiter or waitress has an opportunity to write down all of your credit card information. Does that stop you from paying by credit card at restaurants? No.

The CEO of Verifone posted a video on YouTube that explains and shows how credit card numbers can be stolen using the device. He also explains that a fake credit card scanner app had been created in less than an hour and then was sent to all the major credit card companies for comment.

The PR angle:

As stated above, Verifone called Square out on this “flaw” in their product. Was this really the best move for the image of Verifone? By calling out Square in such an unorthodox way, making a video specifically targeted at Square and showing a flaw that is inherent in all in-person credit card transactions, the CEO has left people seeing Verifone as the big established company trying to bully and squash the young vulnerable upstart.

People at Verifone should have done what other companies would have done and gone through private channels to get their point across. Their big mistake was publicly calling out Square and doing it in such an ostentatious manner. Now, every time Verifone is mentioned, people may only think about how they bully upstart companies to deter competition. It seems that Verifone is mostly concerned with Square undercutting its fees.

Where was Verifone’s PR help when they came up with the idea of handling this situation? It’s a big mistake that the CEO of Verifone may be apologizing for in the near future.

CEO of Square, Jack Dorsey responded to the accusations in an open letter which has been posted on the company’s website.

“Our partner bank, JPMorgan Chase, continually reviews, verifies, and stands behind every aspect of our service, including our Square card reader,” said Dorsey.

The video made by Verifone’s CEO is embedded below.

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