Target took a real black eye after the theft of up to 70 million credit card and debit card numbers during the holiday season. But is the criticism unwarranted?
The Red Retailer has long had the cachet of offering affordable fashion and being the "non-Walmart." In reality, what happened to them is less about them and more about the vulnerability of our banking system.
Now we're seeing many published reports that name Neiman Marcus among other retailers that were similarly breached. And that's just the tip of the iceberg.
The real problem is we are the only developed nation that has not adopted the chip and PIN standard in our credit and debit cards. We're still using magnetic strip technology from the 1960s. That's why crooks target U.S. payment systems for hacking.
If you've not seen the chip I'm talking about, it's a little silver shiny thing that is about a third of an inch square. That chip means that even if a crook can capture your card info, they can't duplicate the card.
The changeover to the chip system is slowly starting to happen; when your credit card renews and you get a new one in the mail, it will likely have a chip in it.
But if you're wondering why we are the only developed nation not using chip and PIN, it's because of the powerful bank lobby in Washington. The banks felt it was cheaper for them to deal with fraud than to wholly switch to a new system that would practically eliminate criminal breaches.
So there's anger about the Target debit card and credit card breach, but Target did not cause the problem. I think they're taking some cheap shots here...unless further info comes out that showed them to be grossly negligent in some way.
As for you, you're most at risk from the Target breach if you used a debit card at checkout. Ask your bank for a new debit card if that's the case.
(Chase has a different approach. They've restricted use by cardholders who had a number that was breached. That's like punishing you for their failure to do modern banking!) Learn more about the consumer protections on both credit cards and debit cards.
I am one of the people affected by the Target breach, although I used a credit card. If you did too, your assignments (and mine) are as follows:
- Go through your statements this month and next month with a fine tooth comb. Identify any bogus charges the crooks may have pushed through and dispute them with your credit card company within 60 days.
- Beware of anyone calling or emailing you trying to impersonate Target or your bank. The cons may ask you to click a link or to verbally confirm additional personal information over the phone. When in doubt, hang up the phone or click out of the email and then call your bank or visit their website to verify the legitimacy of the request.
- If you wish to continue using debit in the future, be sure you tie it into a separate account that's only used for debit transactions so only that money is at risk.
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