Magazine article American Banker

Banklike Data Security Rules for Retailers Would Reduce Breaches

Magazine article American Banker

Banklike Data Security Rules for Retailers Would Reduce Breaches

Article excerpt

Byline: Molly Wilkinson

Target's recent settlement with 47 states and the District of Columbia over the retailer's 2013 data breach brought to mind this well-known John F. Kennedy quote: "There are risks and costs to a program of action -- but they are far less than the long-range cost of comfortable inaction."

The $18 million settlement is in addition to $202 million in legal fees and other expenses resulting from the breach, in which hackers stole data from up to 40 million credit and debit cards of shoppers who had visited Target stores during the holiday season.

With hacking and data breaches on the rise, it is more important than ever for merchants to protect their customers' personal financial information. New reports surface almost weekly of the sneaky methods used by hackers, like skimmers and malware, to steal credit card numbers and other identification for their criminal activities. It is time for merchants to take data security more seriously and invest in their customers' safety.

As of June 6, there have already been over 700 data breaches in 2017, exposing over 10.8 million records, according to the Identity Theft Resource Center. Retailers are among some of the biggest targets, and restaurants and hotels are increasingly falling victim, too.

Today's consumers choose to pay with credit cards and other electronic payment methods at places they frequent on a regular basis, trusting that large corporations have security protocols in place. Some companies may have invested time and money in new infrastructure to protect consumer information, but retailers are not held to the same data security standards as the financial sector, which is subject to regulation and oversight by the federal government.

The hotel industry was affected by a massive data breach that surfaced on May 4. Sabre Corp., a Texas technology company that provides reservation software to more than 32,000 hotels worldwide, was notified of unauthorized access to payment information, and quickly scrambled to close the loophole in their data security system. Sabre still does not know how much information was compromised.

Arby's was another recent hacker target. As was reported in February, from October 2016 through January 2017 as many as 355,000 credit cards were compromised due to a malware attack on cash registers. Arby's became aware of the hack in mid-January, after the company was alerted by a credit monitoring service.

Best American Hospitality Corp., the restaurant group that owns Church's Chicken and the 70-year-old Shoney's chain, also suffered a breach that started in late December 2016 and went through early March. That breach, too, was caused by cash registers infected with malware at 37 locations. Credit card numbers, customer names, expiration dates and verification codes were all compromised.

Just last week, Sears announced that payment systems for its Kmart stores had been infected with malware. Though Sears says the attack was identified and contained, it did confirm that customers' credit card information was compromised. …

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