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Craft Store Michaels May be Latest Mega-retailer to Get Hacked


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by Megan Geuss - Jan 26 2014, 11:00am AUSEST
US Secret Service is looking into a potential credit card grab at the chain.
On Saturday, security journalist Brian Krebs reported on what looks to be yet another security breach at a big-name national retailer. This time, the craft store Michaels is in the crosshairs. It seems that after being used at Michaels-owned locations, fraudulent purchases were made on at least “hundreds” of customer cards.

While Michaels has not yet confirmed a data breach, it published a press release (PDF) on Saturday saying “The Company is working closely with federal law enforcement and is conducting an investigation with the help of third-party data security experts to establish the facts. Although the investigation is ongoing, based on the information the Company has received and in light of the widely-reported criminal efforts to penetrate the data systems of U.S. retailers, Michaels believes it is appropriate to let its customers know a potential issue may have occurred.” The US Secret Service has confirmed that it is investigating the matter.

The news of a potential hack follows similar reports starting late November that Target suffered a data breach that lost the credit card numbers of over 40 million customers and the personal information of over 70 million customers. Earlier this month, luxury retailer Nieman Marcus also admitted that malware on its systems had exposed 1.1 million payment cards to hackers.

Brian Krebs broke news pertaining to both of those hacks, and his sources within the payment processing industry have been reliable.

One of Krebs' anonymous sources expanded on the news of the probable Michaels hack to compare it to the previous retail break-ins: “What’s interesting is there’s another [arts and framing] store called Aaron Brothers, and within past week or two there was a lot of activity talking about Aaron Brothers. One of the things I learned the other day is that Aaron Brothers is wholly owned by Michael’s. It really does look like kind of the way we saw the Target breach spin up, because the fraud here isn’t limited to one store or one area, it’s been all over the place.”

If confirmed, this could be the second high-profile attack in recent years for Michaels. Reuters reports that in 2011, “hackers replaced some 84 PIN pads on payment-card terminals at a small number of its stores, resulting in the theft of about 94,000 payment card numbers.”

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