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Arts & Thefts: Michaels Stores Hit by Debit-Card Scam

Fin - Daily Ticker - US

Day after day there seems to be another news headline detailing the new scheme of hackers and scammers trying to steal your personal information...and your money.

First there was the Epsilon breach, then there was the Sony PlayStation Network breach and now you can add Michaels Craft Stores to the list. (See: Computer Wars: Cyber-Attacks "Can Get Very Scary Very Quickly," Expert Says)

The retailer discovered it was the target of a debit-card scam when it was contacted by "banking and law enforcement authorities" after customers reported fraudulent transactions to their accounts, according to the company's website. Right now, Michaels says less than 100 people have reported fraudulent transactions to their personal accounts.

Turns out thieves had tampered with the debit card PIN pad in more than 80 of the chain's stores across 20 different states. The culprits who have yet to be identified used skimmers to steal not only debit card numbers, but the PIN id as well.

"Similar to the device legitimate businesses use in processing customer card payments, the skimmer reads and records the magnetically encoded data on the magnetic stripe on the back of the card," according to the Federal Trade Commission. "That data then can be downloaded either to make fraudulent copies of real cards, or to make purchases when the card is not required, such as online."

As concerning as this story is, there is some good news as Aaron and Henry note in the clip above. If your bank account is compromised, you do have FDIC insurance to cover any losses. And, usually the company is responsible for any loss you incur.

If you're worried whether your debit or credit card is safe to use, Henry highlights a very good point: "Carrying cash is dangerous too;" it could just as easily be stolen, destroyed or flat out lost.

To date, Michaels has removed every single PIN pad from all of its stores. "We are confident Michaels stores are a safe place to shop," said Michaels CEO John Menzer.

But the store is encouraging all its customers who bought items with a credit or debit card to "monitor their statements, report any suspicious account activity, and change any PIN numbers and other account security settings."

For ways to fight back against identity theft visit the FTC's website.