Target’s Troubles Mount After Massive Security Breach

The fallout continues after Target confirmed that 40 million debit and credit cards used in its brick-and-mortar stores during the holiday shopping season may have been compromised. It’s now being called the second-largest data breach of its kind.

In the latest developments:

• Both the Secret Service and the U.S. Department of Justice are investigating the security breach, Target says.
• Two U.S. senators have asked the Federal Trade Commission to investigate as well.
• At least 15 lawsuits have been filed seeking class-action status.
• Target’s Buzz score, rating its perception by consumers, dropped from 26 to -19. “Prior to the breach, Target’s consumer perception score was more than twice the average of the retail group that includes chains such as Wal-Mart Stores Inc., Gap Inc., Best Buy Co. Inc. and Amazon.com Inc.,” CBS MoneyWatch reports.
• JPMorgan Chase imposed limits on about 2 million Chase debit cards that were used in Target stores between Nov. 27 and Dec. 15, the time period when the breach occurred, to no more than $300 a day for purchases and $100 a day for cash withdrawals. Chase later raised those limits to $1,000 for purchases and $250 for cash, NBC News said. Other financial institutions have imposed restrictions.

For its part, Target is offering free credit monitoring to those affected and provided a 10 percent discount last weekend to customers. “While we can’t provide specifics because the investigation is ongoing, we are working closely with the United States Secret Service to bring those responsible to justice,” it said.

Also, it said: “We have communicated to 17 million guests via email and reminded them that unless they have seen fraudulent activity on their account, there is no urgent need to call.”

While no one’s yet said exactly how this hacking was done, you can bet these types of attacks will continue. USA Today explains why:

First, the U.S. stands alone as a modern nation that continues wide use of magnetic-striped payment cards designed more than 40 years ago to mechanically store payment card account numbers.

In the Internet age, the rest of the world, led by Europe, Asia and Canada, has moved to chip-embedded payment cards, which are much more difficult to counterfeit.

And secondly, American corporations and consumers have become inured to public disclosures of massive data breaches and sophisticated cash-out capers.

We’ve already explained what you should do if you used your credit or debit card at a brick-and-mortar Target store during the breach.

Do you think consumers who shopped at Target are justified in suing the company? Let us know in the comments below or on our Facebook page.