Cash only: how to protect yourself from a data breach
Have you ever been the victim of a data breach? Were you a victim of the Target data breach, Neiman Marcus credit card breach, Michaels data breach or Sally Beauty Supply data breach? Data breaches and identity theft are all too common in today's world. With computers storing vast amounts of personal information, theft need not occur in person. Credit cards, debit cards and checks are information that can destroy a person’s financial life if placed in the wrong hands. Here’s what you need to know about data breaches and how to protect yourself from a data breach.
What is a data breach?
In general, a data breach is when sensitive information is stolen from its rightful owner and reaches the hands of someone who should not have access to it. Data breaches can be accidental – such as an employee accidentally leaving a computer open, only to have an unauthorized person steal it – or they may be intentional, such as the large-scale DSW, Target data breach or Sally Beauty Supply attempted data breach. Data breaches are problematic for several reasons.
Why should I care about a data breach?
Consider a data breach as identity theft – what is done with the information will determine its impact on your life. What will occur if your name and social security number are used to open a fraudulent checking account? What will happen if you have good credit and a thief uses your information to obtain a car loan but never makes the payments? What if this thief uses your debit card and depletes your life savings? The consequences can be devastating.
What happened during the Target data breach?
Starting on Black Friday in 2013, this incident was, according to "Good Morning America", “one of the largest data breaches of all time.” 40 million credit card numbers used in Target stores were stolen, along with each customer's name and the card expiration date. The Target data breach occurred over a period of less than a month and it is believed that the theft occurred through devices placed on cash registers in the stores. According to "Good Morning America", with the information the Target data breach thief or thieves have obtained, a fraudulent credit card can be created.
What happened during the DSW data breach?
DSW, a designer discount shoe store, is no stranger to data troubles. The DSW data breach was similar but impacted a smaller number of customers. This case also involved a wider variety of customer information. 280,000 unsuspecting shoe lovers had their personal information stolen, most likely through stolen IDs and passwords. 96,000 customers using checks had their check numbers and driver’s license numbers compromised. 1.4 million customers were the victims of their credit card numbers being exposed. Credit card numbers, checking account numbers, driver’s license numbers, IDs and passwords are the perfect combination for a thief's paradise.
Target data breach, Neiman Marcus credit card breach
Target was thrust into the media spotlight when a data breach was discovered during the 2013 Christmas shopping season. The number of customers impacted was larger than originally announced. Shortly after the actual number of victims was disclosed, it was reported that high-end retailer Neiman Marcus also experienced a credit card breach.
Michaels data breach investigation
On January 25, 2014, arts and crafts chain Michaels announced that it may have experienced a data breach. In a letter posted on its website, Michaels CEO Chuck Rubin informed customers of an investigation being conducted with the assistance of law enforcement officials. The number of potential victims was not disclosed but the letter to Michaels customers stated that the company "recently learned of possible fraudulent activity." Michaels customers believing that they were impacted by the data breach are advised to contact their bank and order a free credit report from TransUnion, Experian or Equifax.
How can I protect myself from a data breach?
Finance guru Dave Ramsey, author of Financial Peace, advocates paying cash to stay on a budget using “the envelope system”. This method of staying on budget also happens to be an excellent way to reduce your risk of becoming a victim of a data breach. While some expenses are more convenient to pay using a credit card – such as electricity or internet – other expenses, such as gasoline, groceries, entertainment and miscellaneous expenses – are more easily tracked using cash instead of credit.
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© 2013 erinshelby
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