Dallas

Shoppers on Alert for Retail Security Breaches This Holiday Season

Breaches at big-name retailers have some consumers rethinking where they’ll shop

Target, Home Depot, Neiman Marcus, Michaels and Kmart were all hacked in the past year. Hundreds of millions of debit, credit or payment accounts compromised. With the holiday season approaching, the threat isn’t going away.

“This was really kind of the year of the retail breach,” said John Watters, CEO and founder of iSIGHT Partners, a Dallas-based cyber-intelligence firm.

This is the time of year when consumers spend a lot of money.

“Money is in motion. Where there is money in motion, there are criminals behind it,” said Watters. “There’s a large surge and spend during the holidays. Since purchases are so rampant, it much harder to find fraud.”

And cybercrime is lucrative.

According to a report from the Center for Strategic and International Studies sponsored by McAfee, which came out this summer, cybercrime cost the global economy about $400 billion annually. Forty million individuals in the United States, about 15 percent of the population, had their personal information stolen by hackers. Researchers said in 2013, the United States notified 3,000 companies they had been hacked. Retailers were a prime target.

“The more losses the credit card issuers and the retailers have, that’s going to get passed through to consumers over time in the form of higher interest rates and higher fees and lost profits to those stores. So there is a cost to the economy associated with it,” Watters said.

And security breaches at these retailers are changing the way some consumers shop will shop this holiday season, according to one survey from Austin-based CreditCards.com. Almost half of those surveyed say they’re likely to avoid shopping at stores affected by data breaches. And 48 percent of major credit and debit card holders plan to use cash more frequently.

For consumers who prefer plastic, experts use credit instead of debit because there are better protections.

“With debit cards it’s a little different because you’ll still probably get that money back, but it can take two weeks for you to see that money come back. And in the interim you won’t have that money to make a rent payment or buy your kid a winter coat so that’s a big deal,” said Matt Schulz, CreditCard.com’s senior industry analyst.

But be sure to pay the bill in full at the end of the month.

Schulz also recommends consumers get in the habit of looking at bank and credit card statements as often as they check their Twitter and Facebook account. They can also monitor transactions by setting up charge or fraud alerts so they get texts or emails when their card is used.

Experts also said separating which cards are used where can also reduce hassles in the event of a breach. Use one card for those recurring monthly bills you pay online, like toll tags and utilities.

“Get a separate card you don’t use anywhere else. So it’s nothing more than your bill paying medium that you’re not out there swiping at all your retailers,” Watters said.

Retailers, credit card companies and banks are working to beef up security. By October 2015 they’ll transition to using more secure cards with an embedded microchip. This technology, already used around the world, will make hacking more difficult. But consumers will still need to be ware.

“Oftentimes criminals and fraudsters are a step ahead or two ahead of the good guys, especially when it comes to technology,” Schulz said.

Contact Us