How Banks Are Responding to Massive Target Breach
The security breach that took place in Target stores during the peak holiday shopping season hurt more than the giant retailer. It created substantial headaches for the banks and issuers behind the 40 million accounts with additional costs of fraud and replacement cards. Banks have reacted with restrictions, account monitoring and some potential lawsuits against Target.
JP Morgan Chase immediately responded by restricting withdrawals to no more than $100 a day in cash and $300 in purchases on customers who used debit cards. The bank has since raised those limits to $250 a day in cash and $1,000 a day on purchases. Chase also opened a third of its branches to help issue new cards and work with larger withdrawals.
Some banks, such as Chase and Citi, are reissuing the cards it considers at risk. Cards are being sent by mail during these first days of January.
Banks are also warning their customers of steps to take to protect themselves and reduce online risk.
American Express sent out an email to customers advising them to create unique passwords with a combination of letters and numbers; regularly check on account activity; review credit reports on a regular basis; and avoid giving out personal information in email or over the phone. American Express also recommended its cardholders sign up for account alerts that will send a message when there is any activity in an account.
PNC is asking their customers to closely monitor their accounts for unauthorized purchases. The bank reassured their cardholders that they would not be liable for purchases they did not make.
The fact that the affected debit and credit cards had magnetic strips may hasten the development or movement to cards with either chip and pin or biometric technology.
About Bill Hardekopf
Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.