Neiman Marcus says 1.1 million credit cards hacked; low fraud rate isn’t actually good news

www.neimanmarcus.com
www.neimanmarcus.com

Neiman Marcus on Thursday released several details about its Target-like credit card hacking incident, including these key points:

  • Hackers had access to their systems from July 16 to Oct. 30.
  • A malicious program attempted to “scrape” payment card information during that time frame
  • Between those two dates, about 1.1 million cards were swiped by consumers, potentially exposing those accounts to hackers
  • Mastercard, Visa, and Discover told Neiman Marcus that 2,400 of those cards have been used fraudulently so far
  • Consumers who shopped at the store last year will be offered free credit monitoring

While it might seem like good news that only a tiny fraction of the exposed accounts have been hit with fraud, I wouldn’t be so sure. That fraud rate is probably no higher than normal, a finding that I released several weeks ago when I teamed up with BillGuard to examine this very issue.  This could mean several things: Perhaps banks are surgically stopping all fraud before it starts.  Perhaps criminals only bothered to take a few of the credit card numbers they had access to.  I think a more likely explanation is that the criminals haven’t really even started exploiting their stolen data yet. They are sitting on it, waiting for all this attention to die down, and won’t even bother trying to initiate fraudulent transactions for months — or longer.  So now is no time to let down your guard. Watch those credit card bills.

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About Bob Sullivan 1640 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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