Data Breach Could Prove Costly for Target
At this point in time, details of the recent severe data breach at Target are still unclear. it is prophesied by industry insiders, that the retailer will likely have to pay tens of millions of dollars in remediation, notification costs, fines, legal fees and settlements.
Target confirmed on Thursday, December 19th, 2013 that a breach occurred that let hackers access credit and debit card numbers, expiration dates and security codes of shoppers that bought merchandise in its retail stores between November 27th and December 15th of this year.
While Target has not actually disclosed precisely how many cards were impacted by the breach, industry sources have reportedly set the number at over 40 million. It the total is correct, this would make it the largest breach involving payment cards since a hacking of payment processor Heartland in 2009 that compromised upwards of 100 million cards. Since that time Heartland has since paid more than $140 million in costs related to the breach.
Target has yet to disclose exactly how the intrusion occurred. However, experts suggest that the hackers penetrated company’s Point of Sale (POS) network or that malware was somehow inserted into card swipe devices used by customers.
It is also possible that the track data was captured by some sort of network sniffer or other means that went farther up the payment chain that could have been on a corporate server, or outside of the store,
Even if Target was compliant with Payment Card Industry Data Security Standard (PCI DSS) standards at the time of the breach, it could still face stiff fines from card associations like Visa and MasterCard, and compensation to card issuing that have to cancel and re-issue cards.
Additionally, Target will likely have to pay higher merchant fees for the foreseeable future, and will likely be hit with class action lawsuits from affected customers
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If you are unsure if your systems are PCI DSS Compliant, please contact the CCS Retail Systems Support Department.
– John