On Thursday, December 19, 2013, Target, Corp (NYSE: TGT) published a financial news release confirming the unauthorized access to payment card data in its U.S. stores (more than 1,700 locations according to the company’s 2012 annual report).
According to Target, Corp.’s financial news release, approximately 40 million credit and debit card accounts may have been impacted between November 27 and December 15, 2013. This number is consistent with the figures shared by Krebs on Security, which first reported the breach on Thursday, December 18. KrebsOnSecurity.com is the website of Brian Krebs, a national computer security expert and former Washington Post reporter.
According to sources at two different top 10 credit card issuers, the breach extends to nearly all Target locations nationwide, and involves the theft of data stored on the magnetic stripe of cards used at the stores.
The news release release claims that the “issue has been identified and resolved,” since “Target alerted authorities and financial institutions immediately after it was made aware of the unauthorized access, and is putting all appropriate resources behind these efforts,” but this morning, news emerged of a potential class action lawsuit against Target, Corp.—confirming what lawyers told Reuters on December 19.
Target today confirmed it is aware of unauthorized access to payment card data that may have impacted certain guests making credit and debit card purchases in its U.S. stores. Target is working closely with law enforcement and financial institutions, and has identified and resolved the issue.
According to an article published by Joel Rosenblatt on December 20 via Yahoo! Finance, one Christmas shopper has already taken steps to file a lawsuit against the Minneapolis-based retailer in Federal Court.
The lawsuit, which is based on allegations of “invasion of privacy and negligence,” claims that the shopper may have been exposed to identity theft from the data and security breach at Target.
According to information published by Bloomberg, Jennifer Kirk, a California resident, seeks to represent other Target customers affected by the security breach in a class-action lawsuit. The case is Kirk v. Target Corp. (TGT), 13-cv-05885, U.S. District, Northern District of California (San Francisco).
Investor Relations: Target, Corp. (TGT)
According to Target, Corp.’s investor relations website, the common stock price experienced an increase between December 17 and December 18 (up to about $63.50), but decreased on December 19. As of December 20, the price of common stock at Target, Corp. is $62.48—one of the lowest rates for Target’s stock over the last 30 days.
With a class action lawsuit brewing in California and speculation about underperforming Canadian stores, one must wonder if investors will continue to purchase stock in the company after such a large security breach.
The security breach at Target may not be the largest of its kind, when compared to the 2009 breach at Heartland Payment Systems that affected 130 million consumers, but it is hitting bargain shoppers at a crucial time. On December 2, Bloomberg reported that Black Friday / Small Business Saturday weekend was the first spending decline since 2009, which reinforced projections for a lackluster holiday and increased chances retailers will extend the deep discounts already hurting their profit margins.
Last year, Target, Corp. partnered with Neiman Marcus to produce the Neiman Marcus-Target Shop Collection—a collaboration that was called “a flop” by New York Magazine and countless fashion bloggers and financial analysts (read more here).
According to The Wall Street Journal, Target reported $1.6 billion in profit on $51 billion in sales in the nine months ended Nov. 2.
What Should Target Shoppers do Now?
Target recommends keeping an eye on your credit or debit card statements and calling your bank or card provider if you see any fraudulent activity. As a general rule, you should get a copy of your credit report periodically by visiting AnnualCreditReport.com or calling (877) 322-8228. You can also set up a fraud alert through the three nationwide credit reporting agencies, Equifax, Experian and Transunion.
This to-do list from Elizabeth Harris from The New York Times is a good resource for individuals who may be unfamiliar with credit checks and what to look for as they attempt to monitor activity that may result from the security breach at Target, Corp.
- Forbes | Social Media can help Prevent Target Credit Card Losses
- Krebs on Security | Sources: Target Investigating Data Breach
- TIME | The Target Credit Card Breach: What You Should Know
- Talking Biz News | Target admits breach on 40 million accounts
- USA Today | Target confirms massive credit-card data breach