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Hackers Don't Discriminate: Small & Medium-Size Businesses Experience Data Breach

Posted by admin on 2/6/14 10:00 PM

The following excerpt is from an article written by Michael Riley and published on Bloomburg Technology. Many people assume that hackers only target large-scale, global or national companies, but Riley reveals that is not the case. He describes the rising occurrence of data breaches in small and medium-size businesses and the monumental price tag they rack up in lost revenue. Take a look the read his full article to learn even more:

Ukrainian hackers have attacked several dozen small- and medium-sized U.S. retailers in data raids that appear to be smaller and less sophisticated than the ones that hit Target Corp. (TGT) and Neiman Marcus Group Ltd., according to a cybersecurity firm.

RSA Security LLC discovered the theft when it found a large cache of stolen data on a server used by the hackers, according to an analysis posted on the company’s website today. The breach, which started Oct. 25 and continued into last week, affected at least 41 companies, including one medium-sized retailer and several gas station chains, said an RSA executive, who asked not to be named because the details are confidential. The hackers compromised credit-card data for about 50,000 customers, the executive said.

The hackers stole approximately 25 million transaction records -- though the majority were duplicates or unusable -- as they raided businesses across Texas and California, among other states, the RSA executive said.

The data breaches are complicating matters for retailers as they try to attract balky shoppers after waging price wars during the holiday shopping season. Target, which has said as many as 110 million customer accounts were compromised between Nov. 27 and Dec. 15, said sales at its U.S. unit were “meaningfully weaker” after the data theft was disclosed. Neiman Marcus said Jan. 23 that about 1.1 million credit cards may have been compromised.

Fraud Losses

The U.S. accounted for almost half of $11.3 billion in global fraud losses on payment cards in 2012, according to the Nilson Report, which is based in Carpinteria, California. Gross fraud losses, based on $21.6 trillion in worldwide volume, amounted to 5.22 cents per $100. Average fraud losses for global card brands, including Visa, American Express and MasterCard, is about 6 cents for every $100 in total volume, according to Nilson.

Merchants paid $2.79 for each dollar of fraud losses in 2013, a 3.7 percent increase from a year earlier as online risks increased, driven by higher fees and interest to financial institutions, according to a study by LexisNexis and Javelin Strategy & Research.

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