Shein’s owner was fined $1.9M for not informing 39 million users of a data breach.

Shein is in the headlines due to a 2018 data breach as the fast fashion e-commerce platform continues to dominate marketplaces throughout the world.

According to a notice from the attorney general (AG) of the state of New York, Zoetop, the company that owns Shein and its sister brand Romwe, was fined $1.9 million by New York for failing to manage a security incident correctly. The letter arrived so much later than when the cyberattack occurred because New York doesn’t, like Maine, New Hampshire, California, or other states, publicly release data breach notices.

The business had tremendous growth during the pandemic as people were drove to shop online. Shein was created in China and recently shifted its primary assets to Singapore. In the past two years, it has experienced one of the highest growth rates among consumer online platforms due to its astounding affordability and huge selection of clothing.

According to the announcement from the AG, a cybersecurity incident that started in 2018 led to the loss of 39 million Shein account credentials, including those of more than 375,000 New Yorkers. According to an inquiry by the AG’s office, just “a percentage” of the 39 million hacked accounts were contacted by Zoetop, and for the great majority of the affected consumers, the company did not inform them that their login credentials had been taken.

The AG’s office came to the conclusion that Zoetop had misled the public with its comments regarding the data breach. In one instance, the business misrepresented the extent of the impact, claiming that just 6.42 million customers had been affected and that it was in the process of notifying all affected customers.

Since 2018, a lot has changed. Shein has grown from a fledgling online retailer of quick fashion at the time to a comprehensive e-commerce platform that poses a threat to Amazon. The number of downloads for the app in the United States initially exceeded Amazon’s in the second quarter of this year.

The data leak may have been back in 2018 but Shein has been in business since 2008, making the last four years quite recent in the company’s history.

Even though Shein has received negative press, trend- and price-conscious customers may still purchase there. However, much work needs to be done before regulators and the general public will start to trust Shein.