Uh Oh: Target Data Breach Was WAY Bigger Than First Reported

Yahoo Tech
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Giant U.S. retailer Target said Friday that its recent data breach affected many more consumers and types of customer information than originally thought, and that the debacle hurt December sales.

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Target sharply lowered its fourth-quarter earnings outlook and said it was unable yet to estimate the costs related to the breach.

Target revealed on December 19 that its payment card data had been breached, affecting about 40 million customers. The stolen data included credit and debit card data, customer names and PINs.

But Friday, Target said the ongoing investigation had revealed that hackers also obtained other forms of customer data, including names, mailing addresses, phone numbers or email addresses for up to 70 million people.

“I know that it is frustrating for our guests to learn that this information was taken and we are truly sorry they are having to endure this,” Target CEO Gregg Steinhafel said in a statement.

Target said consumers would have “zero liability” due to any fraudulent charges arising from the breach. It offered one year of free credit monitoring protection.

Target is cooperating with an investigation led by the Justice Department and Secret Service about the data breach. A group of state attorneys general has launched a parallel investigation aimed at protecting victims.

New York Attorney General Eric Schneiderman, who has joined the state probe, called the latest Target disclosure “deeply troubling.”

“Consumers in New York and around the country expect and deserve companies that protect their personal information when they shop on their websites and in their stores,” Schneiderman said in a statement.

Target also said fourth-quarter earnings had been hit by “meaningfully weaker-than-expected sales” since it disclosed the data breach.

Target now expects fourth-quarter comparable-store sales to decline 2.5 percent from its prior forecast of flat sales.

Target said earnings for its U.S. segment were estimated for the fourth quarter at $1.20 to $1.30 per share, down from the prior guidance of $1.50 to $1.60 per share.

The company said it may need to take a charge for expenses related to the data breach to cover a number of potential costs, including reimbursements for credit card fraud and liabilities from civil litigation, government investigations and enforcement proceedings.

“These costs may have a material adverse effect on Target’s results of operations in fourth quarter 2013 and/or future periods,” Target said.

Target shares have underperformed the S&P 500 since the disclosure. Target shares dropped 1.2 percent in midday trade Friday.

This article was originally published on AFP.