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The cost of the massive payment card hack that hit the  Schnucks supermarket chain in recent months could cost the company $80 million in Illinois alone.  

Court records show Schnucks wants to move an Illinois lawsuit related to a security breach affecting credit and debit cards of its customers to a federal court.

Schnucks has said the breach of up to 2.4 million cards dated to December and came to light in March. The company said the lawsuit filed against them on behalf of a Belleville shopper is meritless.

Two of the suits have been filed in Missouri; one in Illinois.
 
The suits allege that Schnucks knew about the breach days, perhaps longer, before it revealed the hack, and should have told customers about it sooner. The suit filed in Illinois on April 25 says the breach cost customers time and money, requiring card holders to spend hours canceling and getting replacement cards, and re-setting automatic payments.
 
The St. Louis Post Dispatch reports state law in both Missouri and Illinois says that any entity that stores or maintains personal data has to notify victims as soon as they become aware of a breach. But Schnucks has said that the data stolen from the cards included only credit card numbers and expiration dates — not names — and therefore, the company was not required to inform victims of the data theft.
 
The breach began in early December when malicious software, or malware, began lifting card data from the company’s system. The data was being accessed as the transactions were awaiting authorization within the company’s processing system.
 
The malware, the company said, was stripping data from the magnetic strip on the backs of cards. That strip contains different tracks that are read by card readers. The first track contains a person’s name; the second contains the card number and expiration date. The hackers, Schnucks said, accessed data on only the second stripe.
 
The company said it became aware on March 15 of questionable activity used on 12 cards used at its stores. On March 19 it hired Mandiant, a Virginia-based forensics firm, to conduct an investigation.
 
It confirmed the breach to the Post-Dispatch on March 22.
 
Schnucks located the source of the breach on March 28, and had executed a “containment plan” within 36 hours. The company issued its first news release on the matter March 30, saying the problem was “found and contained.”
 
Published in Local News

We will hear more from Scott Schnuck today in a you tube video about a credit  and debit card breach. The grocery chain now says 2.4 million Schnucks customers may have been compromised between December of last year and March 2013.

Schnucks says only the card numbers and expiration dates were stolen, not the credit card holder's identity.

“On behalf of myself, the Schnuck family, and all of our 15,000 teammates, I apologize to everyone affected by this incident,” said Scott Schnuck in a press release. “Over the years, technology has helped us deliver superior customer service, but it also introduces risks that we have actively worked to manage through compliance audits, encryption technology and various other security measures.”

The company also sent news outlets a timeline showing what happened and when. The company says it was told of an issue on March 15, formed a response team on March 19, contacted police on the 20th, began to identify the problem on the 28th, but did not communicate any concern to customers until March 30.

According to the company, “if you used your card at any one of the 79 affected stores between December 2012 and March 29, 2013, your card could have been accessed.”  Click here for the FULL LIST

The company has declined to do interviews due to legal concerns over pending lawsuits. The company is preparing a video statement instead.

Schnucks has set up a call line for customers to use for any questions. The number is 1-888-414-8022. The line is open Monday through Friday from 9 a.m. to 5p.m. and the weekend of April 20-21 from 9 a.m. to 4 p.m.

“Customers have asked me if it is safe to shop at Schnucks,” Schnuck said. “Yes, we believe it is, and we will work hard to keep it that way.”
Published in Local News

ST. LOUIS (AP) — A discovery made by two Washington University scientists could play a role in preventing credit card fraud.

Marcel Muller and Ron Indeck were attempting to shrink bits of data onto a hard drive in the mid-1990s when they learned that magnetic media has what amounts to a fingerprint.

Tiny signals are present on the magnetic medium that comprises both hard drives and the strips on the back of credit cards. If the unique fingerprint on those strips is compared to fingerprints in a database, fraud can be detected.

California-based MagTek has adopted the technology, seeding the market with millions of card readers that can detect the fingerprints. The company's chief executive says the technology just needs to be "turned on" and used.

Published in Local News

ST. LOUIS (AP) — The Schnucks grocery store chain says it's found the source of a credit card fraud problem that has victimized dozens of people.

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In a news release Saturday, Schnucks Markets Inc. announced that the computer forensic firm it hired discovered that a computer code was recording customers' credit and debit card numbers. The suburban St. Louis-based grocery says it's taken "comprehensive measures" designed to block further access.

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CEO Scott Schnuck described what happened as a "cyberattack" and says the company is cooperating with authorities.

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The chain learned March 15th that some customers had noticed unauthorized charges for credit cards they used at Schnucks. Shoppers were encouraged to pay with cash or checks until the fraud problem was resolved.

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Authorities said many of the unauthorized charges were at out-of-state big box stores.

 

Published in Local News

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