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Target Confirms Encrypted PIN Data Was Stolen

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(credit: Joe Raedle/Getty Images)

(credit: Joe Raedle/Getty Images)

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MINNEAPOLIS (WCCO/AP) – Target said Friday that debit-card PINs were among the financial information stolen from millions of customers who shopped at the retailer earlier this month.

The company said the stolen personal identification numbers, which customers type into keypads to make secure transactions, were encrypted and that this strongly reduces risk to customers. In addition to the encrypted PINs, customer names, credit and debit card numbers, card expiration dates and the embedded code on the magnetic strip on back of the cards were stolen from about 40 million credit and debit cards used at Target stores between Nov. 27 and Dec. 15.

Security experts say it’s the second-largest theft of card accounts in U.S. history, surpassed only by a scam that began in 2005 involving retailer TJX Cos.

“We remain confident that PIN numbers are safe and secure,” spokeswoman Molly Snyder said in an emailed statement Friday. “The PIN information was fully encrypted at the keypad, remained encrypted within our system, and remained encrypted when it was removed from our systems.”

However, Gartner security analyst Avivah Litan said Friday that the PINs for the affected cards are vulnerable and people should change their codes since such data has been decrypted, or unlocked, before. In 2009 computer hacker Albert Gonzalez pleaded guilty to conspiracy, wire fraud and other charges after masterminding debit and credit card breaches in 2005 that targeted retailers such as T.J. Maxx, Barnes & Noble and OfficeMax. Gonzalez’s group was able to unlock encrypted data. Litan said changes have been made since then to make decrypting more difficult but “nothing is infallible.”

“It’s not impossible, not unprecedented (and) has been done before,” she said.

Besides changing your PIN, Litan says shoppers should instead opt to use their signature to approve transactions because it is safer. Still, she said Target did “as much as could be reasonably expected” in this case.

“It’s a leaky system to begin with,” she said.

Credit card companies in the U.S. plan to replace magnetic strips with digital chips by the fall of 2015, a system already common in Europe and other countries that makes data theft more difficult.

Minneapolis-based Target Corp. said it is still in the early stages of investigating the breach. It has been working with the Secret Service and the Department of Justice.

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Meanwhile, CBS News is reporting that consumer reaction to their response to the theft was not encouraging.

YouGov’s BrandIndex, which reports from an online panel of 2.5 million people to measure how consumers rate corporate reputations, says that the Target brand had plunged by 35 points on a 200-point sliding scale during the day following the company’s disclosure of the hack.

The index ranges from 100 points on the high end to -100 points on the low end.

Target’s brand was at 26 points on the scale the week before news of the breech broke. It dropped to -9 on Dec. 20.

It has since slid further, standing at -19 points on the BrandIndex scale on Dec. 23, despite the company’s offer of a 10 percent discount and an offer for free credit monitoring.

CBS News reports that many have avoided shopping at Target, canceled their Target credit cards, and may even be planning to sue the company.

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved.This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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