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Four lessons from the Target data breach

Perhaps the biggest media story of December occurred when news broke that the debit and credit card numbers of 40 million Target shoppers were compromised in one of the largest U.S. retail data breaches ever recorded. What made matters worse was the timing of the breach, which spanned from Black Friday through much of the Christmas shopping period.

Credit card terminalNo one wishes for these kinds of events to happen, so when they do, it’s important to find takeaways and apply them going forward. Auguste Rodin, the world-renowned French sculptor famous for such works as “The Kiss” and “The Thinker”, once said, “Nothing is a waste of time if you use the experience wisely.”

So, even though new information continues to trickle out, there are already a few lessons to note from the Target data breach.

Lesson 1: Debit cards remain a perfectly safe way to make purchases

News of the data breach led some reporters and bloggers to publicly denounce the use of debit cards in favor of cash only (or credit cards). The truth is that debit cards are a safe way to make payments. Debit cards are actually governed by the same “zero liability” protections afforded to credit cards—this generally extends to the cardholder so long as no negligence is exhibited.

Lesson 2: The best defense is a good offense

Technology has made it easier than ever to keep close watch on your accounts. These days, banks provide many ways for you to check your transaction activity. Depending on the bank, these electronic services include online banking, mobile banking, text banking, e-mail alerts and e-statements. E-mail alerts, in particular, are a great way to keep up with transactions and changes to your balance.

Similarly, technology has made it easier for banks to monitor potentially fraudulent transactions posting to accounts. At Central National Bank, our fraud detection software continually monitors transactions. This software, coupled with the insight of our experienced customer service team, was instrumental in enabling us to catch fraudulent transactions connected with this particular breach before official news was released.

Lesson 3: Businesses will continue to be targets for data breaches

While the Target data breach became—to many—the public face of cybercrime and the potential impact it can have in our lives, there were actually 600 disclosed data breaches in 2013. That’s nearly two per day. And, while that doesn’t seem like many, when you consider the consumer information that many businesses have access to, the number of potentially-impacted individuals grows exponentially.

To prevent becoming the subject of a similar news story, businesses that process credit card payments should pay attention to the Payment Card Industry Data Security Standard (PCI DSS) compliance programs instituted by their merchant processors. Maintaining compliance with these standards is an important first step in the ever-vigilant quest to secure sensitive information.

Lesson 4: New methods are needed for preventing fraud

If you’ve traveled to Europe lately, you’ve likely noticed that European cards are equipped with microchips. These chips, which are embedded inside the card, make it more difficult for criminals to make fraudulent purchases with counterfeit cards. The United States has been slow in adopting this technology for a number of reasons; however, it’s believed that the use of chip cards in the U.S. will see widespread adoption by October of 2015.

As always, if you have questions about suspicious transactions on your account, it’s important to notify your bank immediately. Customers of Central National Bank can contact our Customer Service department at 1.888.262.9226.

Bryan is a treasury management specialist and the director of marketing at Central National Bank. He enjoys running, reading (anything by Malcolm Gladwell), binge-watching House of Cards on Netflix, volunteering and playing the trumpet.

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Posted in Banking, Business Banking, Personal Finance