NEW YORK — Home Depot said Thursday that 56 million debit and credit cards are estimated to have been breached in a data theft between April and September at its stores in the U.S. and Canada. That makes it the second-largest breach for a U.S. retailer on record, behind TJX Cos.s theft of 90 million records, disclosed in 2007, and ahead of Targets pre-Christmas 2013 breach that compromised 40 million credit and debit cards. Home Depot, the nations largest home improvement retailer, said that the malware used in the data breach has been eliminated. It said there was no evidence that debit PIN numbers were compromised or that the breach affected stores in Mexico or customers who shopped online at Homedepot. It said it has also completed a major payment security project that provides enhanced encryption of customers payment data in the companys U.S. stores. But unlike Targets breach, which sent the retailers sales and profits falling as wary shoppers went elsewhere, customers seem to have stuck with Atlanta-based Home Depot. Still, the breachs ultimate cost to the company remains unknown. Greg Melich, an analyst at International Strategy & Investment Group LLC, estimates the costs will run in the several hundred million dollars, similar to Targets breach. This is a massive breach, and a lot of people are affected, said John Kindervag, vice president and principal analyst at Forrester Research. But he added, Home Depot is very lucky that Target happened because there is this numbness factor. Customers appear to be growing used to breaches, following a string of them this past year, including at Michaels, SuperValu and Neiman Marcus. Home Depot might have also benefited from the disclosure of the breach coming in September, months after the spring season, which is the busiest time of year for home improvement. And unlike Target, which has a myriad of competitors, analysts note that home-improvement shoppers dont have many options. Moreover, Home Depots customer base is different from Targets. Nearly 40 percent of Home Depots sales come from professional and contractor services. Those buyers tend to be fiercely loyal and shop a couple of times a week for supplies. Home Depot on Thursday confirmed its sales-growth estimates for the fiscal year and said it expects to earn $4.54 per share in fiscal 2014, up 2 cents from its prior guidance. The companys fiscal 2014 outlook includes estimates for the cost to investigate the data breach, providing credit monitoring services to its customers, increasing call center staffing and paying legal and professional services. However, the profit guidance doesnt include potential yet-to-be determined losses related to the breach. The company said it has not yet estimated costs beyond those included in the guidance issued Thursday. Those costs could include liabilities related to payment card networks for reimbursements of credit card fraud and card reissuance costs. It could also include future civil litigation and governmental investigations and enforcement proceedings. We apologize to our customers for the inconvenience and anxiety this has caused, and want to reassure them that they will not be liable for fraudulent charges, Home Depots chairman and CEO, Frank Blake, said in a statement. From the time this investigation began, our guiding principal has been to put our customers first, and we will continue to do so. The breach at Home Depot was first reported on Sept. 2 by Brian Krebs of Krebs on Security, a website that focuses on cybersecurity. Targets high-profile breach pushed banks, retailers and card companies to increase security by speeding the adoption of microchips in U.S. credit and debit cards. Supporters say chip cards are safer, because unlike magnetic strip cards that transfer a credit card number when they are swiped at a point-of-sale terminal, chip cards use a one-time code that moves between the chip and the retailers register. The result is a transfer of data that is useless to anyone except the parties involved. Chip cards are also nearly impossible to copy, experts say. Target has been overhauling its security department and systems and is accelerating its $100 million plan to roll out chip-based credit card technology in all of its nearly 1,800 stores. Home Depot said it will be activating chip-enabled checkout terminals at all of its U.S. stores by the end of the year. ——— Follow Anne DInnocenzio at Twitter/adinnocenzio TECHNOLOGYNEXT FROM AROUND THE WEB 7 Female Celebrities Who Have Physically Abused Their Men (Fame10) Best Credit Cards 2014 - Rewards, Cashback, Miles (GET) Understanding the Most Common Brain Disorder: Neurologist Interview (Health Central) Celebrities Who Dont Support The Gay Community. I Cant Believe #4 Is On Here! (ViewMixed) MORE FROM ABC NEWS How to Wipe Your Old iPhone Sep 18, 2014, 11:58 AM Users Hit Snags Downloading Apples New iOS 8 Sep 17, 2014, 3:36 PM Why the iPhone 6 Could Be Apples Biggest Success Ever Sep 15, 2014, 11:22 AM Which New iPhone Is Right for You? Sep 18, 2014, 12:57 PM TECHNOLOGY VIDEO The New Space Race How to Keep Your Credit Card Safe from... Mind The Gap 5 Ways to Use Your Old iPhone Apple Mobile Users Set to Receive Free... NASA Announces Return to Manned... 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Posted on: Fri, 19 Sep 2014 00:19:49 +0000
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