US stock market daily report (January 30, 2014, Thursday)
January 31, 2014, Friday, 09:29 GMT | 04:29 EST | 13:59 IST | 16:29 SGT
Attorney General Eric H. Holder Jr., appearing before the Senate Judiciary Committee on Wednesday, told lawmakers that the Justice Department will find the hackers who lifted 40 million debit and credit card numbers from Target (TGT-NYSE) customers. Personal information including names, home addresses and telephone numbers of up to an additional 70 million Target customers was nabbed during the attack. Justice is working to find not only the perpetrators of the hack attack but also, anyone who uses the stolen data for credit card fraud. Holder confirmed the active investigation into the vulnerabilities in the nation’s credit card system and said, "The Department of Justice takes seriously reports of any data breach, particularly those involving personally identifiable or financial information, and looks into allegations that are brought to its attention.”
Target, the nation’s second-largest retailer said it became aware of the cyber-attack on December 15, 2013. The retailer ssued an apology and offered customers a free year of credit monitoring and identity-theft protection. On Wednesday, Target confirmed that its investigation indicated that the hacker stole a vendor’s credentials to access its system.
Neiman Marcus recently revealed that 1.1 million of its customers had also been affected by a three-month data breach. The luxury retailer reported that their cyberattack resulted in 2,400 cards from customers being used in fraudulent transactions so far. A Russian teenager was identified by security firm IntelCrawler as the author of the malware that was potentially used in the cyber-attacks against Target and Neiman Marcus. IntelCrawler said it expects more retailers to announce a breach in their systems since more than 60 versions of the malware have been sold to cybercriminals overseas.
The FBI warned retailers of more attacks to come after discovering 20 breaches during the past year, caused by the same malware that corrupted Target’s system.
Senate Democrats including Robert Menendez (N.J.) and Mark R. Warner (Va.), requested a hearing which is slated for next week, to examine whether retailers and financial service providers are doing enough to protect against fraud and identity theft. A briefing is expected to be held Thursday with executives from Target and Senate Democrats, Staff on the House Oversight and Government Reform Committee. Per reports, the committee has scheduled a series of briefings with key actors, including credit union trade groups and the Federal Trade Commission, for information on threats to retailers’ data security.
Senator Richard Blumenthal (D-Conn.) has urged the FTC to launch an investigation into Target’s security practices. The FTC can bring enforcement action against any company that fails to safeguard their customers’ personal information. Molly Snyder, Target spokeswoman said the company is in communication with the FTC.
The U.S. stands alone as a modern nation that continues wide use of magnetic striped credit cards designed over 40 years ago, that mechanically store customers credit or debit card account numbers. The rest of the world, led by Europe, Asia and Canada, has moved to chip-embedded credit or debit cards in the new Internet age, which are much more difficult to counterfeit.
In October 2015 for merchants and October 2017 for gas stations, Visa (V-NYSE), MasterCard (MA-NYSE), Discover (DFS-NYSE) and American Express (AXP-NYSE) intend to shift liability of fraudulent transactions to U.S. businesses that do not migrate to contactless chip technology known as EMV.