What is a data breach?
What is a data breach and should you be concerned?
Customer payment security is more important than ever. There are various ways criminals can undermine retail operations, from card skimming to data hacks. Merchants, especially those that receive large amounts of credit card and debit card payments, have every reason to pay attention to developments in hacking and tech security so they're not caught off guard. There's no reason for a retailer to not know what a data breach is, as the cost of customer data being compromised is high, and many businesses risk losing loyal customers.
A loss of security
A data breach occurs when malicious forces, usually a hacker or group of hackers, target the customer databases of an organization. The goal is to scrape credit or debit card information, and/or other personally-identifiable information, from consumers. The criminals sell the information to fraudsters, who then use the data to make sham purchases online and elsewhere. (1)
The criminals' methods of breaching databases can vary, though direct methods through the point of sale system are a common tactic.
The most common reason that attacks occur is a lack of strong anti-security measures in conjunction with constant attacks from hackers looking for an opening. Often, IT professionals fail to follow even simple compliance measures to assure losses would be mitigated in the event of a breach. (2) Moreover, management and company leadership often downplay the importance of information security at their folly. This creates a situation ripe for disaster.
The cost of non-protection
The first problem that retailers face in the aftermath of a data breach is paying to repair the damage. That includes paying for audits to check for further possible exploits, determining an exact number of users affected and what caused the breach in the first place. (3) Cards will need replacement, often at the expense of the store. Merchants will likely also be responsible for refunding any fraudulent purchases. In some cases, lawsuits will be filed by customers and issuing banks.
Even after the financial fallout is taken care of, merchants may face a loss of reputation and consumer trust. This will mean that they'll avoid the store for most if not all of their purchases, especially if the items necessitate using a credit card. The amount of time it could take to restore confidence and finances could take months, if not years.
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