Target Paranoia

imagesTarget has been in the news since late November.  You may think I am a little late in commenting on this one, but it seems that the story is still evolving and it may only be the beginning (insert dramatic music here – da da daaa).

In Early December it is reported that Target was hit in a major credit card security breach.  The first report listed up to 40 million cards were compromised getting the card numbers, expiration dates, embedded codes on the magnetic strips and possibly even pin numbers.  It was first estimated that 30 Million Cards were breached.  Two weeks later the number rose to 70 Million, and in mid-January the estimates rose as high as 110 Million cards.

Our family shops from time to time at Target.  It is infrequent, as it is not a store that we enjoy shopping at due to a number of reasons which include limited selection, location and shopping experience.  We happened to be visiting my son, a Senior at the University of Pittsburgh (a 4.5 hour drive for us) over the Thanksgiving holiday.  It was his last home football game (he is the Mascot) and was being honored on the field on Black Friday.  On Saturday we took him to refill some supplies for his apartment, stopped at Costco for the bulk items and then went to the Target in the same shopping center for a few smaller items.  We spent less than $20 at Target and we used our personal debit card.

The story comes out and the media states the first thing to do is to check your bank statement fort any fraudulent charges.  Step one completed and we had no charges that weren’t our own.  Step two is to change the PIN number.  On some types of cards this is relatively easy to do.  However, most Banks recommended that you replace debit cards entirely.  So we go to the bank to replace the card and directly from the TD Bank commercials, the bank tells us we can have a new card in “7 to 10 business days”.  I expected to hear the teller explain that business days are Monday, Tuesday…etc.  Being a long term customer they provide us with a temporary card on the spot.

My daughter and her boyfriend also had shopped at Target during the breach time and went through similar a process, without a temporary debit card being issued.  I have heard similar stories from many friends and neighbors.  We all reacted to the breach and limited any potential personal damage.  I am sure that millions of people did not heed the advice and did not replace cards, etc.  So where is the damage?  If the breach was a large as Target states, 110 Million and if the perpetrators only attempted to use just 1% of the cards, that equals 110,000 cards.  Assume that 90% of the consumers changed out their cards.  That leaves 11,000 cards vulnerable.  Use an average transaction of $200 and you have $2.2 million in fraudulent charges.

Where’s the beef? When will the other shoe drop?  Resulting stories of fraud have been minimal so far. I searched and found only one mention of consumer impact and it was “Colleen McCarthy, 26, of Cleveland, Ohio, is among those who are avoiding Target. McCarthy used her Chase debit card at a local Target on the Friday after Thanksgiving and received a notice from Chase a few days after news of the breach first broke. The letter identified her as a potential victim of the Target breach but said, “don’t worry.” At the time, she was only somewhat concerned. But Monday night McCarthy received a call from Chase, alerting her that someone tried to use her debit account twice in Michigan. The thief cleared $150, which caused her rent check to bounce. Chase restored the money to her account. “This has been a nightmare,” she said. “My rent check bounced. My debit card had to be canceled. And who’s to say what other people have access to my information?””

I found another story that reported that BillGuard a company that specializes in finding fraudulent charges stated that of the 35,000 BillGuard customers that notified them of Target transactions during the time, only 2% were hit with fraudulent charges, which is the same ratio as those customers who were not affected or shopped at Target.

So is it possible that the thieves were after something else?  Something bigger, or was it to prove their capability.  I am no conspiracy theorist, but this one just does not seem right to me.  So that leads me to my musical reference. In my memory I had thought there was a song by the Kinks called Paranoia.  It turns out the song is called “Destroyer” and the words were a little different than I recalled as it seems to be a follow up to their hit song Lola.  Here’s the piece that applies to this blog:

Cause there’s a red, under my bed
And there’s a little yellow man in my head
And there’s a true blue inside of me
That keeps stoppin me, touchin ya, watchin ya, lovin ya

Paranoia, the destroyer.
Paranoia, the destroyer.

Listen to the song on YouTube here to see what I mean about Lola:

http://www.youtube.com/watch?v=_WJ6FbcWYRU&feature=kp

Please let me know your thoughts, is this bigger or am I just paranoid?

Thanks!

Stan  skornaga@biztecheg.com

Please note this addendum:

Breaking News Tied to my Target Post – looks like an HVAC firm’s logon was used to get access to Target’s systems http://is.gd/PSbubN

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