Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Home Depot Breach Boils Our Blood – and It Should

Companies / Corporate News Sep 26, 2014 - 12:13 PM GMT

By: Money_Morning

Companies

Shah Gilani writes: Who should worry about data breaches?

Everyone.

You as an individual are at risk. Your bank account is at risk. Your credit is at risk. You’re at risk in ways you never thought about.

Merchants are at risk, maybe to the tune of tens of billions of dollars.


Banks are at risk. In fact, the whole financial system could be at risk.

And we hate to think about it, but the entire country is at risk.

And then there’s the security implications of breaches of critical U.S. infrastructure imply. And the global geopolitical implications of cyberwar.

That’s scary.

We know that’s all out there, but today I’m going to put a single data breach under a microscope.

So, put on your lab coats and let’s get started…

The E-Castle Walls Are Coming Down

Today, I’m focusing on basic credit and debit transactions.

They’re not basic anymore.

The electronic world we’ve constructed isn’t impenetrable. In fact, it’s pretty porous.

Almost every day businesses are attacked by hackers, by malware, by criminals intent on stealing proprietary information, trade secrets and customer information. They’re going after our payment card numbers, passwords, addresses – anything they need in order to steal or make money.

Corporate and government data breaches are so common now that there’s a website dedicated to what’s happening: www.DataBreachToday.com.

The data breaches that have garnered the most media attention recently are the Target Corp. (NYSE: TGT) and the Home Depot Inc. (NYSE: HD) thefts.

The more recent Home Depot breach dwarfs the one last year at Target. So let’s zero in on what happened at the hardware giant and what’s going to happen in the future.

Home Depot’s more than 2,000 North American stores were all affected. Some 56 million Home Depot customers’ payment cards were exposed – about 40 million Target customers’ cards were breached.

Needless to say, the lawsuits are starting to fly.

One lawsuit, which is seeking class-action status, was filed on behalf of Home Depot customers even before the retailer admitted its systems had been breached. That suit anticipated the eventual admission and points to the fact that Home Depot knew about the breaches and didn’t come clean, which would have helped customers who were subsequently affected protect themselves in some way.

Now banks are getting on the sue-Home Depot bandwagon. Two credit unions are suing and seeking class-action status, claiming unspecified losses related to refunding fraudulent charges, reissuing cards, opening and closing accounts, stopping or blocking payments, notifying customers, increasing fraud monitoring and lost revenues from a drop-off in accounts.

Whether banks can sue merchants for losses related to data breaches is about to be ruled on by a judge in a Target lawsuit. In that suit, Target is trying to derail a consolidated class action by a group of banks claiming the retailer is responsible for their losses. One estimate of Target’s liability to the banks suing it is a cool $18 billion.

If the banks prevail, merchants’ liability in the future will be staggering.

Between banks and customers suing, merchants are going to face charges of breach of confidence, privacy, fiduciary duty, negligent misrepresentation and outright negligence. In short, the plaintiffs are accusing the merchants of failing to meet their legal obligation to protect customers and customers’ banks.

Sometimes, as may be the case with Home Depot, there may be obvious (at least in my mind) culpability. And it may be clear that obligations were not met where they could be reasonably expected.

Apparently, Home Depot knew about the breaches at least five months before going public about it. An outside data security firm warned the retailer about “using out-of-date malware detection” systems. And a former Home Depot information securities manager has said he warned the company about its out-of-date antivirus software on its point-of-sales systems.

It was the point-of-sales systems that were compromised at both Target and Home Depot.

In fact, the U.S. Department of Homeland Security, based on U.S. Secret Service findings, warned Home Depot about Mozart (the name of the malware that infected the retailer’s systems) infiltrating its checkouts.

Data security experts think Mozart to be a customized malware designed to attack Home Depot’s point-of-sale systems. In other words, whoever designed Mozart understood, or knew how to get around, Home Depot’s safety systems. Mozart was “customized” to the retailer’s technology. And it was running for at least five months before anyone detected it.

In a nutshell, the malware used a “RAM scraper” to capture a customer’s card and related information between the time – just milliseconds – it was swiped and the time it took Home Depot’s systems to encrypt the customer’s information.

Wow!

Home Depot encrypted its customers’ information – but Mozart stole the data before encryption occurred.

What will the eventual costs to Home Depot be? What will merchants be responsible for in the future? What was the Secret Service doing looking into Home Depot’s systems? What’s out there in cyberland that we have yet to face, defend ourselves against and combat?

Who knows?

All I know is that technology is a double-edged sword.

Source : http://moneymorning.com/2014/09/25/the-best-hope-for-reducing-taxes-isnt-what-you-think/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in