It was the data breach that stopped holiday shoppers in their tracks! Almost one year ago, Target, one of the biggest names in retail, was the first really big retailer to admit the personal information of its shoppers had been breached.
Many shoppers were shocked at the time.
"I thought I would only use cash. It would be better to use cash, instead of using my card," said Margo Spencer of Detroit. Spencer is like many other shoppers who have concerns about keeping their personal financial information safe.
"I don't know how these large companies can get breached as big as they are, so it's a big worry," said Travis Wilson of Dearborn.
Last December, Target reported 40 million debit and credit cards had been compromised between November 27th and December 15th. The retailer moved to tighten security, investigate the breach, and reassure customers. However, at the time, Target stood alone suffering a big consumer backlash.
"I think its absolutely correct that we all panicked, " said Odysseas Papadimitriou, CEO of the credit card comparison website CardHub.com.
Data Breach Dominos: Other Retailers Fall
As the months went by, many other retailers and their customers started to fall victim to hackers with other data breaches.
"2014 was definitely a turning point," said Jody Dabrowski, Assistant Vice-President of Risk Management at Community Choice Credit Union in Farmington Hills.
Neiman Marcus, Michael's, PF Chang's, and Home Depot were among the major companies that suffered their own data breaches. The Home Depot breach was even bigger, with 56 million payment cards affected, but Target seemed to suffer the biggest black eye.
Dabrowski says Target may have been the victim of extremely bad timing. "That it happened at Christmas time. People felt more vulnerable. They were shopping more at that time."
"It took everyone by surprise that a retailer of this size to have been breached for such a long time without even noticing," said Odysseas Papadimitriou, CEO of CardHub.com. He says the panic consumers felt may have actually helped the situation.
"Maybe it was our over-reaction that everyone jumped into the problem and ensured that customers did not get affected in a big way."
A year later, Papadimitriou says we've learned just because a retailer is hacked doesn't mean you, the consumer, will pay the price.
"We have learned that credit card companies have mechanisms in place to safeguard our information even when things go wrong."
Security Changes in the Works!
Here's what else has changed. President Obama signed the Buy Secure Initiative executive order in October to improve credit card security. Companies like Target and Home Depot have already sped up their transition to credit cards with more secure microchips. Banks and credit unions are getting on board, and there's a reason both sides are looking to change.
"The liability shifts to the weakest point," said Jody Dabrowski, Assistant Vice-President of Risk Management at Community Choice Credit Union in Farmington Hills.
Starting in October 2015, if fraud occurs, the business that hasn't adopted chip credit cards will pick up the costs. Currently, financial institutions bear the burden of protecting consumers. The United States actually lags behind other countries in switching to the chip.
"These terminals are extremely costly and that's why the extra time is needed to ensure that we have compliance across the board and not only part of the market," said Odysseas Papadimitriou, CEO of the credit card comparison website CardHub.com.
Immune to Data Breach Bad News
While Target seemed to suffer the worst backlash, he wishes other retailers were also held responsible in the court of public opinion. "It's unacceptable for Target or for Home Depot or any other major retailer that got hacked to not make data security their top priority."
As consumers heard about other breaches, it seemed as each one became less and less shocking. "It's almost like we became immune to retailers not safeguarding our information," Papadimitriou.
If not immune to breaches, customers have become more accepting of the fact hackers will strike, and you, the consumer, must take some responsibility for protecting your accounts.
"If you're using a debit or credit card, that's in your name and that's your money. That's your credit report that it's getting reported on. So, you want to take responsibility to make sure you check that account," said Jody Dabrowski, Assistant Vice-President of Risk Management at Community Choice Credit Union in Farmington Hills.
It's a way of life, many shoppers have already adopted. "Of course, that's always in your mind, but you just have to be cautious about where you buy things from, and always keep up on your statements and your balances," said Shantel Stiles, a shopper outside the Home Depot in Allen Park.
How To Protect Your Accounts!
There's little doubt we will see more data breaches in the future. Working with the Better Business Bureau, Ruth to the Rescue has come up with these
guidelines to help you protect your credit or debit cards before, or after, you suspect they've been involved in a breach.
1) Stay calm. Consumers are not liable for fraudulent charges on stolen account numbers.
2) Check with the website of the retailer for the latest information. Type the store name directly into your browser. Do NOT click on a link from an email or social media message.
3) On that note- beware of emails that may come into your inbox, claiming to help you deal with the crisis. Those emails could be fake, hoping you'll click on a dangerous link or share personal information.
4) If your card was compromised, you will likely hear from the bank or card-issuer first. If you have questions, call the customer service number on your card.
5) Consider putting fraud alerts on all your accounts. Check with each bank or financial institution on how to do so. You can usually set a dollar amount that
will spark a fraud warning, if the company sees suspicious activity.
6) Monitor all your financial accounts carefully. If you have computer access, try checking your account weekly. Do not wait for the monthly statement.
7) If you see a fraudulent charge, report it to your bank or credit card issuer immediately so the charge can be reversed and a new card issued.
8) Keep receipts so you can prove which charges are legitimate.
9) Be careful about how often you use your debit card. If you debit card is hacked, thieves will be stealing your money, and debit cards do not have the same protections as credit cards. Make sure you know what kind of protection your account will offer.
10) Consider having a "dirty" credit card. This card would be used for all public transaction and online purchases. Ideally, you can pay it off each month, and
if it's hacked you'll have better protection. Use your debit card for getting cash, and use other credit cards for major purchases.
11) Change your passwords on financial accounts frequently. Also, make sure you create "strong" passwords that will not be easily guessed.
12) When you hear about a date breach, share that information with family and friends, so they can also follow these steps to protect themselves.