And then there were two.
It seems Target (TGT) isn’t the only retailer to have its customer data hacked. Super posh Neiman Marcus has also announced that private information and account numbers were swiped from its supposedly secure servers. While the Neiman heist is much smaller than the 70-million accounts stolen from Target, the Dallas-based department store operator says the so-called “malware” was lurking undetected in its system SINCE JULY!
“It’s a debacle wrapped in a fiasco and shrouded in a sham,” my co-host Jeff Macke says of the growing crisis in the attached video.
Of course Neiman, like Target and countless other hack victims before it, is promising to tighten things up and has emailed an apology and a link to a free credit-monitoring service.
It’s a response that is almost laughable, were the stake not so high, as well as one that is not likely to achieve its intended purpose; stemming customer defections.
Call us crazy, but to inform customers via email that the security of their email has been violated seems a tad lacking. Only time will tell how customer habits will change, but it seems clear that there is a bundle of money to be made for smart consulting/PR firms as well as cyber security outfits, assuming they didn’t previously have the Target account.
In the meantime, one can only expect that there will be more data breach disclosures in the coming days and weeks. The notion of there being only two attacks seems unlikely.
There also are many questions over what the ultimate impact will be on consumer habits, and whether these high profile data breaches will in fact slow the rising tide of our increasingly cashless society. If so, cash and bitcoin could be the unwitting winners while banks and processors like Mastercard (MA) and Visa (V) could be losers.
At the same time the digital fingerprints, so to speak, seem to suggest the hackers originate from Russia, but really, evil intentions know no borders. Nor does the internet. That a hacker lives in Latvia or Los Angeles is not really relevant.
It’s a known fact that the magnetic strip credit cards used in the U.S. utilize the finest technology that was available in 1970. For now, merchants and payment industry players mostly think the cost of converting to a better system still outweighs the benefits, but I would not be surprised to see some renewed open-mindedness on this matter, especially when the next and the next and the next security violations are disclosed.