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UPDATE: Target Confirms Massive Credit, Debit Card Data Breach

Secret Service investigating theft of payment card information at hundreds of Target stores around country
MINNEAPOLIS -- Target shoppers have been victims of a stunning theft of information on their credit and debit card accounts in recent days.

The giant retailer said Thursday about 40 million credit and debit card accounts may have been impacted in U.S. stores between Nov. 27 and Dec. 15, 2013.

"Target alerted authorities and financial institutions immediately after it was made aware of the unauthorized access, and is putting all appropriate resources behind these efforts," the chain said in a statement. "Among other actions, Target is partnering with a leading third-party forensics firm to conduct a thorough investigation of the incident."

The Secret Service is investigating, according to a spokesman for the agency, which safeguards the nation's payment systems.

Investigators believe the data was obtained via software installed on machines that customers use to swipe magnetic strips on their cards when paying for merchandise at Target stores, according to a person familiar with the matter who was not authorized to discuss it and declined to provide further details.

Krebs on Security, a closely watched security industry blog that broke the news, said the breach involved nearly all of Target's 1,797 stores in the United States, citing sources at two credit card issuers.

"When all is said and done, this one will put its mark up there with some of the largest retail breaches to date," the report cited an unnamed source as saying.

The biggest credit card breach at a U.S. retailer reported to date was an attack against TJX Cos, the parent of TJ Maxx and Marshalls. The company disclosed in March 2007 that data from 45.7 million payment cards had been stolen by hackers over 18 months. Banks later asserted in court documents the hackers could have obtained more than 94 million account numbers.

It is not yet clear how the attackers were able to compromise point-of-sales terminals at so many Target stores across the country. Doing so would have required careful planning by sophisticated cyber criminals.

An American Express spokeswoman said the company is aware of the incident and is putting fraud controls in place.

Representatives for Visa and MasterCard declined to comment.

There are no indications that the theft affected shoppers on Target's website, Krebs reported.

Initial  report:

Federal authorities are investigating a potential security breach at one of the country's largest big-box retail stores.  The alleged theft of information happened during the busiest shopping time of the year.

CBS News has confirmed the Secret Service is investigating a security breach that involves stolen credit and debit card information from potentially millions of Target customers.

"I almost never use cash anymore.  I almost only use credit cards all of the time so that scares me," says Alicia Travis, a Target customer.

Krebs on Security,  a closely watched security industry blog, says the breach started on Black Friday and lasted until this week.  The report states investigators believe thieves stole the data from credit card machines in almost all of Targets stores nationwide.  The online report states the security breach only affected customers who shopped in stores, not online.

"It sounds like the actual payment software was hacked with a piece of malware or some other kind of security breach in the actual credit card processing itself, and that's not very common," says Prof. William McGeveran, an expert in information law.

The magnetic strips on credit and debit cards are full of information.

"Your address, your date of birth, your Social Security number," says consumer credit expert Paul Oster.  "Once they access that, it's very easy for them to open up other credit cards or gift cards."

American Express says the company is aware of the incident and is putting fraud controls in place. Representatives for Visa and Mastercard declined to comment.
Target officials have not made a statement about the investigation.

The secret service is investigating because the agency handles financial crimes.

(Tara Mergener for CBS News)

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