Data Breaches and Online Fraud


In the past, consumers rarely thought about weighing the consequences of using their credit or debit cards and their security. But all of that has changed. With data breaches at an all-time high, it’s no secret that using personal information—such as your name, street address, credit cards, and personal identification—on the web or at any store front can put you at risk.

It was just a year ago that Target was hit with one of the biggest data breaches of 2014. After reporting that over 40 million debit and credit card numbers had been lifted from them the number of U.S. data breaches hit a record high. The damage—a whopping percentage of 27.5 over the number of breaches reported in 2013. But Target wasn’t the only victim of a data breach.

In January 2014, Neiman Marcus announced that as many as 350,000 customers who shopped in their stores from July 2013 to October 2013 were affected by a massive breach. The fraudulent activity was triggered by software which was installed onto their system, in order to collect card information from customers.

Other retail companies affected by foul play were Sally Beauty, Michael’s Craft stores and Home Depot. In March 2014, it was reported that 282,000 debit and credit cards were stolen from the Sally Beauty chain and sold to underground marketplaces. Michael’s, one of the country’s largest craft store chains reported a data breach in January 2014. An approximate 2.6 million cards were exposed. In September, Home Depot announced that 56 million credit and debit cards were affected by a data breach as well as 53 million email addresses.

Retail isn’t the only place where data breaches and online fraud are occurring though. The hospitality industry has been adversely affected as well. In February 2013 hotel franchise White Lodging, who boasts 168 hotels nationwide, exposed hundreds of customers’ personal information. The data breach occurred within the hotel’s gift shops and restaurants rather than the front desk.

Restaurants and supermarkets have also been affected. PF Chang’s Chinese restaurants were victims of a breach in which data was said to have been stolen between October 2013 and June 2014. Supermarket chain, Albertson’s also experienced a data breach. Hackers allegedly broke into the company’s payment network and acquired private customer information. 700 locations were infiltrated in 9 states.

There’s no question hacking and data breaches are on the rise. Companies should be taking extra precautions to protect their stored data from getting into the wrong hands at the mercy of hackers. Most of the breaches that took place in 2014 were accomplished by using basic techniques; forcing many companies to rethink the security measures they implement to protect their client’s information. When Sony underwent a massive cyber security breach in December 2014, the company claimed it had what they believed was an efficient and reliable security system. However, it was later released that Sony had stored customer’s information without it being encrypted. A fact that prompted people to ask, ‘if it happened to a company as large as Sony, who else could it possibly happen to?’

It’s true that most cyber thieves are prowling for money, but some are after Social Security numbers in order to steal personal identities. While cyber criminals seem to be getting better at what they do, and the continuous use of credit or debit cards to purchase goods seem unescapable; the possibility of 100% security almost seems unattainable.

So how can you protect yourself from data breaches and online fraud? There are ways to ease the blow of being the victim of an information leak. Review your bank and credit card statements regularly to look for suspicious transactions. If you have online access to your bank and credit card accounts, it is a good idea to check them regularly. Contact your bank account right away if you notice anything suspicious. Debit card holders should report missing cards right away.

Another way you can monitor for fraudulent activity is to review your credit report. You can also increase your awareness by keeping an eye out for notices from your bank or your frequently visited retailers on data breaches.

Protect yourself just by changing a few online habits. Change your passwords often and use different, more complex ones. Many people use the same password for different accounts because it is convenient. However, this just makes it easier to hack. Keep your passwords organized and set a schedule for when your password changes should take place. It’s simple, yet effective.

Beware of scams and spam through email. Don’t answer unsolicited emails (called Phishing) that are generic and targeting a mass audience, as many of these are scams. Be sure to update your antivirus software for your electronic devices. Spam messages may carry viruses, which can capture key strokes that you use on your computer in order to retrieve personal information.

Lastly, be sure to keep your personal information out of social media sites, such as Facebook, LinkedIn, and Twitter.

At Alpha Card Services we strongly believe in the importance of our merchant’s data security. We are PCI Data Security Standard compliant and our merchants need to be as well. Our goal is to make sure card holder data is protected wherever it is processed, stored or transmitted. To learn more about our PCI compliance program, please click here.

You should also seriously consider our Merchant Data Breach insurance policy in the unfortunate event your business experiences a data breach.

Stay tuned for our next topic on tablet-based POS solutions.


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