Sun, Dec 29, 2013 - Page 13 News List

Target customers’ personal data stolen

SAFE AND SECURE:After a breach of the retail giant’s debit and credit card system, it assured customers that their PINs were encrypted and could not be used

Bloomberg

Customers push shopping carts containing 50-inch televisions at a Target Corp store in Chicago, Illinois, on Thursday. The retailer said on Friday that customers’ personal data have been stolen.

Photo: Bloomberg

Target Corp said information related to shoppers’ personal identification numbers was stolen during the recent breach of its debit and credit card system and that it is confident that customers’ accounts have not been compromised, as the information was encrypted.

The PIN data that was removed can only be decrypted when received by Target’s external, independent payment processor, the Minneapolis-based retailer’s spokeswoman Molly Snyder said on Friday in an e-mail statement. The key needed to decrypt the information never existed on Target’s system and could not have been taken during the breach, she added.

“We remain confident that PIN numbers are safe and secure,” she said. “The PIN information was fully encrypted at the keypad, remained encrypted within our system and remained encrypted when it was removed from our systems.”

Target has been working to retain customer loyalty after saying on Dec. 19 that security for 40 million cards may have been breached from Nov. 27 to Dec. 15 as shoppers made purchases in stores. While the chain said it had identified and resolved the issue, the incident occurred during the most important time of the year for retailers and with shoppers showing a reluctance to spend.

Encryption is the correct way to store information such as PINs, Illinois Institute of Technology in Chicago industry professor of information technology and management Ray Trygstad said in a phone interview.

“Typically pretty strong encryption is used for storage of those things,” he said. It’s “very unlikely” that the hackers will be able to decrypt the PINs, he said.

One risk still facing customers is that hackers could later obtain access to PINs through a so-called phishing scam, Trygstad said. Hackers could use customer information including e-mail addresses to lure them to fake Web sites where they would be asked to enter their card information and PINs.

Target slipped 0.5 percent to US$62.15 at the close in New York. The shares have gained 5 percent this year, compared with a 29 percent increase in the Standard & Poor’s 500 Index.

Even before the incident, Target had been struggling to boost sales and earnings. The retailer’s third-quarter profit trailed analysts’ estimates as US shoppers held back and the retailer’s expansion into Canada dragged on earnings, sending net income down 46 percent from a year earlier.

Since disclosing the breakdown last week, the second-largest US discount retailer has agreed to give some shoppers free credit reporting, assured them they would not be responsible for fraudulent charges and offered a 10 percent discount on purchases last weekend.

The retailer is already facing almost two dozen lawsuits, mostly from customers accusing the company of failing to safeguard their information.

The breach occurred when a computer virus infected Target’s point-of-sale terminals, a person familiar with the matter, who asked not to be identified because the investigation is private, said last week.

The company is investigating the breach with the US Justice Department and the Secret Service, which asked it not to share details of the probe.

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