The Target Hack = Credit Card Theft, Debit Card Theft, or Identity Theft?

The Target Hack = Credit Card Theft, Debit Card Theft, or Identity Theft?

Pick all of the above you think applies and write you answer(s) on a piece of paper.  

Now before I write much more I want you to know I’ve been the victim of Credit Card Theft on at least one occasion and possibly two.  I’ll tell you more about that later.

Before I give you the correct answer(s) to the question I posed in the title, I feel it necessary to review some information regarding the TARGET HACK. 

First and foremost the biggest victim of this event was, get ready……..TARGET. (No I do not work for Target.  I have never worked for Target and to the best of my knowledge have no friends or relatives who are now or have been in the past Target employees.)

Let me explain why I say Target is the biggest and hardest hit victim of the criminal act.  They, to the best of my knowledge, did nothing different than any other major chain store in dealing with credit cards.  They were doing what thousands of stores do every day.  They were taking care of business.  

After Target did the right thing and told the world about all of the stolen data, el crappo hitta de blado.  It happened at the worst time of the year and the media was all over this like stink on a monkey.  Sales dropped.  Some of the media had the story right but many had it wrong.  Certainly many consumers had it very wrong.  Not to mention those salivating lawyers just hovering overhead like vultures gearing up to file money grubbing class action lawsuits.  

Just the other day I was in line making a return (This was not at TARGET) when the woman in front of me went ballistic on the clerk because of her recent “Identity Theft” she claimed to have suffered because of Target.  She said she was a smarter consumer now, but I beg to differ with her.  After listening to her rendition of “Whoa Is Me and My Missing Identity” I can say with 100 per cent conviction this lady would have to climb a ladder just to get up to the level of village idiot.  

There is a chasm of difference between Credit Card / Debit Card Theft, and Identity Theft.

Credit Card Theft is either the physical theft of your credit card or theft of the information of your credit card so it can be used by a person other than the card owner or authorized party for fraudulent purposes.

Debit Card Theft is the same as Credit Card Theft.

Identity Theft is by far the most serious event.  This amounts to the theft of enough personal information so a mirror identity can be created and used to fraudulently make purchases, obtain credit, give false information under the guise of being a different person, or mislead.

The info hacked from Target was Credit Card and Debit Card data, so, now you know the information taken by the TARGET Hackers did not amount to identity theft.    

Debit Card Theft is the second most serious of the three items mentioned.  It’s serious for the very reason I hate debit cards.  When you use your debit card the money is IMMEDIATELY removed from your account.  You cannot easily contest a debit card purchase and if it stolen and used YOU could be on the hook for the first $500.  This amount may vary by bank, but regardless it’s considerably more than your $50 liability for a stolen credit card.  

I just told you about the credit card liability but I didn’t mention that if you have a good history with the credit card company and report a stolen card promptly many credit card companies will waive the 50 beans so you are out nothing.  I personally like my credit cards because I pay off the balance monthly and am getting an interest free 30 day loan.  

For the most part credit card theft isn’t that tough of a deal when it happens.  I mentioned earlier I’ve been there.  Here’s how it happened.  I generally am a creature of habit and use my card(s) at the same place(s).  One time I was running low on gas and tanked up at a station on Charleston.  It was the only odd location where I had used my card during the billing period so logic dictates it must have happened there.  

I am judicious about checking my charges every day.  Forty-eight hours after my gas up I noticed a radioshack.com purchase which I knew was not mine.  I IMMEDIATELY called AmEx and cancelled the card.  They, in return, were glad I was so conscientious that they waived any fee and sent me out new cards – STAT.  Solution – easy – cancel the card and get a new number.  

About that possible second time.  It was about six weeks ago I got a letter from the Community Colleges of Arizona telling me my information was POSSIBLY stolen from their database along with 2 MILLION others.  The letter didn’t look real and since I never attended any classes or correspondence classes at any of the listed campuses, I questioned the validity of this letter.  I actually called them after looking up the information on the Internet and played 50 questions.  My last name was spelled wrong and I concluded they made an error in their findings, however, they gave me FREE ID Theft protection from a major vendor.  

The good news is that same simple solution applies to debit cards.  Cancel the damn thing and get a new number.  Bad news – that $500 possible charge.  Hey, it’s the risk we run for living in a plastic world.  

The TARGET HACK made huge news, not so much because of the information stolen but more so because of the sheer volume of stolen info.  The number being tossed about is 40 million consumer accounts.  Hackers don’t want 40 million consumer accounts.  They want money.  It’s already known the rush is on to sell that information.  Just imagine how long it will take to farm 40 million accounts.  Much of that info will be unusable in very short order.  At $.25 per account this info is worth $10,000,000 but not for very long.  Every hour the price drops because more of those account numbers are being cancelled.  I’ve heard that 20% or 8,000,000 probably weren’t worth much to begin with.  

So what have we learned:

 

1)     What happened at TARGET was Debit Card/Credit Card Theft and NOT Identity
        Theft.

2)      Credit Card Stolen – Quickly cancel card and move on with life.

3)      Debit Card Stolen – See #2 or better still don’t use a debit card – PERIOD.

4)      Identity Stolen – You’re going to be screwed and inconvenienced for a long time.

5)      Hacking Systems and getting caught will put you in the slammer.

6)      Buying stolen account information is a waste of money and may get you a room

        with your hacking buddy.

January 10, 2014  TARGET HACK UPDATE

MORE BAD NEWS FOR TARGET - BUT POSSIBLY SOME GOOD NEWS FOR THOSE HACKED.......SEE BELOW.....

I'm sure, just when Target's executive management team thought things couldn't get any worse.....well, let's just say - whoops.

Today Target executives announced the original hack was nearly TWICE as bad than originally expected.  Instead of 40 million chunks of stolen data it turns out to be, here it comes, 70 million.  This is not good news for Target and its stock holders.  They have already announced they fully expect quarterly earnings to drop.  No surprise on that, however, this next part could be good news for those that were the secondary victims.

Firstly, it is suspected that 20% of the stolen info is bad, for reasons of such things as bad credit and the like.  Now 20% of 70,000,000 is a whopping 1.4 million pieces of bad, or nearly worthless information.  

Next, as mentioned earlier, it takes time to farm through all of this to determine what's good and what's bad.  Shoveling through 70 million accounts will take nearly twice as long as sifting through 40 million.  With a crime of this magnitude, time becomes the thief's worst enemy.  From the criminals perspective, you need to shed this stuff quickly and quietly, and settle for pennies on the $ of your asking price.  

Maybe a better way to look at this is to think of it as counting 70,000,000 $1 bills at one per second.  If you counted non-stop it would take nearly 2-1/4 years to finish the task.  Keep in mind, with 20% waste nearly 1/2 year is time wasted.  Every day that passes more of the good data slowly can become rotten.  

The thief, or probably thieves, in this case do stand to make a lot of money if they can unload this quickly and quietly.  There is also a very good chance of ending up in the slammer and/or DEAD.   

I'm thinking a well planned bank robbery is still very stupid, but it sure seems smarter than hacking this much data. 

© Krystalco LLC 2014  Any publication or reuse of the information on this blog, in part or 
    whole, without express written consent is prohibited.

Have You Ever Counted The Number Of Sheets On A Roll Of Toilet Paper?

Sneaky Ways Companies Are Getting You To Pay More For Less

When I was a kid my mother would occasionally buy a gallon of ice cream.  YUM.  Today the gallon of ice cream is pretty much gone.  What was once considered the standard has gotten smaller.  The new standard of ice cream measurement is three quarts.  It happened slowly and very little noise was made about it.

Here’s how it all went down.  Prices for ice cream slowly were creeping up.  Ice cream sales were slowly falling down because of the higher prices.  Then some genius at one of the companies making ice cream came up with the idea of downsizing the container and dropping the price a little bit.  Consumers took the bait and the next thing you knew ice cream sales were on the rise.  The company was smart.  They promoted the new lower price and never mentioned the new smaller size package.  

Other businesses took notice and now smaller product sizes with the same prices are more the rule than the exception.  Take for example, my Barbasol Shaving Cream.  A few years ago it was a 12 oz. can for 99 cents.  Then it went to an 11 oz. can for the same price.  Today that can is now 10 oz. for a penny less than a buck.  I know somebody is going to say to me, “Hey, it’s only an ounce or two.”  Yep – that’s right. But think about it from the company’s point of view.  In every case of 12 cans sold 1 can was almost pure profit.

Here’s an even better example that was mostly kept under the radar.  H.J. Heinz, the ketchup people, pulled a trick that made them untold amounts of money.  Back in the days of glass bottles of ketchup, somebody at Heinz came up with an illegal profit making gimmick.  They put 7 ounces of ketchup in a bottle labeled 8 ounces.  Unfortunately for them, they got caught.  

Here’s how it all came down.  A woman was carefully following a recipe that called for 8 ounces of ketchup.  She got out a new 8 ounce bottle of Heinz and dumped it into a measuring cup.  Much to her surprise there was only 7 ounces.  She checked another new bottle only to find 7 ounces.  She went to the store and bought another one only to get the same amount.  She realized that every 7 or 8 bottles sold Heinz was getting a free bottle to sell.  She also realized, as a consumer, she was getting ripped off.  She notified the Federal Trade Commission who pulled an inspection on the plant.  Heinz quickly confessed to the sin, paid a huge fine, and quickly swept a potential public relations nightmare under the carpet.   In the agreement Heinz did NOT have to tell how long they were doing it or if any other products were involved.  By not having to disclose how long that practice took place there is the potential that the company’s profits FAR exceeded the imposed fine.  That being the case they could do it again in the future.

At the beginning of this I mentioned toilet paper.  Toilet paper is manufactured in a paper conversion factory.  Toilet paper is made in logs and then cut down to individual rolls.  It only takes about 8 to 10 seconds to roll a log of toilet paper.  By adjusting the roll width by ½ inch you could squeeze an extra roll out of each log.  The factory could make an additional 4 roll pack in less than 45 seconds.  Now let’s assume this is only 50 cents a minute in additional profit.  If the company had 5 toilet paper lines with 20 hours running time per line per day the yearly profit increase would be $109,500.  

This next item I am about to share with you is a sneaky way an insurance company can raise the price of your premium.  You may have seen this advertisement on television, where a representative of the company says the price of the insurance is only $9.95 per unit and guaranteed never to go up.  WOW, what an attractive offer, your price is guaranteed for ever and ever to remain the same.  Think about that.  While you are thinking, remember the old adage, if it sounds too good to be true it probably is.  Have you figured out the catch yet?  If not, let me help you.  The ‘Catch 22’ is in the use of the word “unit”.  The size of a unit is subject to change, and it’s pretty safe to say, the size of the unit will go down while the price remains the same, which in turn equals a back door price increase.  Oh, if this sounds a lot like the ice cream size gimmick I mentioned at the beginning, it’s because it’s the same.  Same price with a new smaller container.

In a previous blog, I mentioned the ever increasing world FEEs.  Here is the link to that blog goo.gl/M4bXk.  The world of the fee is a league of its own for varied and unlimited price increases.  

I’ve heard the argument, “I don’t worry about price increases.  It’s usually just a few cents.”  In some cases it actually is only just a few cents, but as any smart businessperson knows a few cents here and there add up to dollars and a few dollars here and there add up to big dollars.

That is the reason smart business people watch the pennies.  Pennies can translate in millions of bucks for a big company.  

Pennies at the consumer level may not appear to be much, however, that’s far from the truth.  Your pennies add up too.  

Think about this as an example - postage stamps were one time only two cents each.  Today, a postage stamp is currently $.46 and climbing.  During the day of the two penny stamp 1000 stamps would’ve cost you $20.  Today the same 1000 stamps would cost you a whopping $460, which is more than the cost of my car insurance for the entire year.  So there you have it, your pennies do matter.

Someday when you have extra time, just for fun, count the sheets on a new roll of toilet paper.  I sincerely hope you’re not surprised at what you find.


© Krystalco LLC 2013  Any publication or reuse of the information on this blog, in part or 
    whole, without express written consent is prohibited.