UPDATE: Analyst: Target Security Breach is `Alarming'

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MINNEAPOLIS (AP) -- One security analyst says it's "alarming" that Target could experience a data breach putting up to 40 million credit and debit card accounts at risk, considering all of the security the store chain has in place.

Avivah Litan of Gartner Research notes that companies like Target spend millions of dollars a year on credit card security measures. She says she thinks the theft may have been an inside job.

The incident is particularly troubling for Target because it has used its branded credit and debit cards as a marketing tool to lure shoppers with a five percent discount.

Still, Litan says she doesn't think the breach will have much of an effect on Target's sales. She says, "People care more about discounts than security."

Analyst Brian Sozzi of Belus Capital Advisors says Target has been getting more people into the stores with its discounts for using a Target-branded card. He says it's been "a big win" for Target. And he adds, "If they lose that trust, that person goes to Wal-Mart."

STATELINE (WIFR) – It’s a major security breach that has put tens of millions of Target customers at risk. A major credit card hack has taken place during the year’s biggest shopping season that could cost people their money and identities.
People are still pouring in and out of a Rockford Target despite learning of a massive credit card attack that could have them at risk of losing their identity and money.

“It’s getting scarier and scarier all the time. They’ve got access to everything and anything you have.”

The Fortune 500 company says that between the days leading up to Black Friday and this past Sunday, anyone shopping at a location in the U.S. may have had their credit or debit cards exposed to hackers.

“Everybody’s getting hacked so I just try to manage what I can manage and control what I can control and let everybody else do what they’re going to do.”

The information stolen by the swipe ripped off the black strip on the back of cards that hold account information and security codes. The company says the credit cards of about 40 million shoppers nationwide may have been compromised.
P.J. Way is a technology professor at Rockford University and says an attack of this scale is rare and very difficult to pull off.

“This type of hack is very sophisticated, certainly takes more than one individual probably a small group of people if not larger to commit this type of crime,” Way said.

Way says it’s hard to determine what criminals will use all the stolen data for because so many cards have been compromised. He says its best for us to immediately check our accounts for any suspicious activity.
The company said only those who shopped in store during those two and a half weeks may have had their information stolen and those who shopped online should be safe.

There’s a lot of questions about what we need to do to protect ourselves. Many people, are wondering what we should do if we’ve used our credit and debit cards at Target recently.

We spoke with security officer Jennifer Hendon at Alpine Bank who says Target REDcards are compromised as well, which are linked to many people’s accounts. Hendon says we should all keep a close eye on our bank accounts for any fraud activity, saying the best thing to do right now is cancel your debit or credit card to prevent yourself from becoming a victim.

“The best we can do you know is offer customers to go to the ATM and withdraw funds or come into the bank and withdraw cash out to use while they’re traveling or use a back-up form of payment, a credit card maybe they didn’t use at Target."

If you notice any suspicious charges, Hendon says to call your bank first. She says Target is expected to release a list of breached accounts soon. In the next few days, we’re told banks will start sending out letters to people whose accounts were hit and if so, your bank will issue a new debit or credit card. However, mailing those new cards may take some time due to weather and the holiday season.

NEW YORK (AP) -- With less than a week until Christmas, a real-life Grinch has stolen the credit and debit card information of about 40 million Target shoppers.

Target says anyone who made purchases by swiping cards at terminals in its U.S. stores between Nov. 27 and Dec. 15 may have had their accounts exposed. The stolen data includes customer names, credit and debit card numbers, card expiration dates and the three-digit security codes located on the backs of cards. The stolen information included Target store brand cards and major card brands such as Visa and MasterCard. The data breach did not affect online purchases, the company said.

Here are some answers to the most common questions about the theft:

Q: I shopped at Target during that time. What should I do?

A: Check your credit card statements carefully. If you see suspicious charges, report the activity to your credit card companies and call Target at 866-852-8680. You can report cases of identity theft to law enforcement or the Federal Trade Commission. You can get more information about identity theft on the FTC's website at www.consumer.gov/idtheft, or by calling the FTC, at (877) IDTHEFT (438-4338).

Q: How did the breach occur?

A: Target isn't saying how it happened. Industry experts note that companies such as Target spend millions of dollars each year on credit card security, making a theft of this magnitude particularly alarming.
Avivah Litan, a security analyst with Gartner Research, says given all the security, she believes the breach may have been an inside job. Litan says Target's breach suggests that current security standards aren't working.
"It's really a wake-up call to the banking industry, but they never seem to wake up," she said. James Lyne, global head of security research for the computer security firm Sophos, says something clearly went wrong with Target's security measures. "Forty million cards stolen really shows a substantial security failure," he says. "This shouldn't have happened."

Q: Who pays if there are fraudulent charges on my account?
A: The good news is in most cases consumers aren't on the hook for fraudulent charges.
Credit card companies are often able to flag the charges before they go through and shutdown your card. If that doesn't happen, the card issuer will generally strip charges you claim are fraudulent off your card immediately.
And since the fraud has been tied to Target, it'll be the retailer that ultimately compensates the banks and credit card companies.

Q: How much is this going to cost Target?
A: It's too soon to tell. In addition to the fraud-related losses, banks may start charging Target a higher merchant discount rate, which is the amount retailers pay banks for providing debit and credit card services. While the percentage difference may be tiny, it could result in steep costs given the volume of transactions Target does, Litan said. Litan added that the company could also face class action lawsuits from consumers, though most of them will be meritless, and fines from federal agencies. When combined, the costs of the breach could be so steep that they actually prompt Target to raise prices., she said. "The real winner in this is Wal-Mart," she said.

Q: How can I protect myself?
A: Like they say, cash is king. You can only lose what you're carrying, though admittedly many people may not feel safe walking around with a wad of bills in their pocket. As stated before, credit card companies don't hold consumers liable for charges they don't make. Usually the worst thing consumers have to deal with is the hassle of getting a new credit card. And the paper trail generated through credit card transactions can often make it easier do things such as return items you've purchased, or keep track of work-related expenses. It's worth noting that while debit cards offer many of the same perks as credit cards, without the worry that you'll spend more than what's in your bank account, they often don't come with the same kind fraud protections. As a result, those card holders may have a tougher time getting their money back if their number is stolen.

Q: How can future breaches be prevented?
A: Litan said an easy way to prevent fraud would be to eliminate the use of easily cloned magnetic strip cards and upgrade to the kind of microchip technology used in most other parts of the world.
But she said that banks have pushed back against the idea, because the microchip cards costs significantly more than the magnetic strip version and changing over all of the country's ATMs could drive the total costs into the billions of dollars. Lyne said it's unclear if the use of microchip cards would have prevented the Target breach, since it's unclear how it happened, but that it certainly wouldn't hurt.

Q: Why is the Secret Service investigating?
A: While it's most famous for protecting the president, the Secret Service also is responsible for protecting the nation's financial infrastructure and payment systems. As a result, it has broad jurisdiction over a wide variety of financial crimes. It isn't uncommon for the agency to investigate major thefts involving credit card information.

MINNEAPOLIS (AP) -- If you've used a credit card or debit card to shop at Target recently, check your statement. Target says information from up to 40 million customer accounts may have been stolen.

Information such as customer names, account numbers and that all-important three-digit security code on the back of the card may have been stolen.

Target says the breach may have occurred between Nov. 27 and Dec. 15.

Target says once it learned of the breach, it immediately told authorities and financial institutions along with a third-party forensics firm to investigate.

Anyone who suspects unauthorized use should call the company (at 866-852-8680.)

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