Credit Card Data Breach: How Do Credit Cards Get Breached?

A data breach of a person’s credit card means that somebody other than the legitimate owner is exploiting the credit card, which bears the name, card pin, and even the card number, to make unauthorized purchases and other transactions without the rightful owners being aware.

Over the years, many people have attested to their credit card being breached and how they’ve lost precious data in the hands of fraudsters, this unfortunate incident has left many skeptical about carrying out any online financial transactions.

When a credit card is in the hand of one who has privacy to the data, card owner name, and even CVV of another, a breach has occurred. If not secured properly, such an individual could take advantage of the information made available to them for malicious use.

Many ways exist as to how credit card theft happens and how these fraudsters breach the confidential data of unsuspecting card owners; these could be done in the following ways:

Credit Card Breach by Company’s Oversight

Usually, when an organization fails to secure the data of their clients, scammers who have hacked into the website of the company would take advantage of the loopholes by downloading the financial information of this firm’s customers and, by doing so, breach the credit card of their victims. This happens when the company’s protection measures aren’t sophisticated enough to prevent hackers from gaining entry into their database.

Using Malicious Software.

Fraudsters take advantage of using software that can duplicate the information of anyone who downloads into their computers this software to breach their credit card.

This software could appear as pop-up links on a site the victims are browsing. When this link is clicked, a copy of the software is automatically downloaded into their system. Once that is done, the installed malware scans the user’s system and sends them vital information about all transactions, including credit card details.

Other ways could be included sending an unsolicited message and disguising as a representative to ask you for vital information on your credit card and, upon revealing this information, breach your data and cause harm to your account.

Large Co-operation Breaches.

Here, the hackers use highly specialized technologies to source credit cards of customers who do business with large cooperation/firms. Most malicious fraudsters could go to phishing clients’ data, installing codes on the company’s site, which clients use to download, or even giving out details of their credit cards when submitted gets breached.

The increasing rate of this crime has caused many banks to install and make available to their clients various methods to help cushion the effect of their Credit cards and Data being breached. The different strategies they have implemented in the capital one credit card breach settlement are one of them.

Read Also, Credit Card Utilization: Definition, Calculation & How to Fix Credit Spending

Capital One Credit Card Data Breach Settlement.

An unauthorized purchase and data theft are among the various things that could happen when one credit card has been compromised. While this can leave devastating effects on the victims both psychologically and financially, the capital one credit card data breach settlement introduction, in a way, has helped lessen the impact of the pain.

The Capital One credit card data system is an agreement of an organization to settle a certain percentage of its customers’ loss(usually up to $25000) that has occurred due to a data breach provided they (the customers) can provide legal documents that could aid the payback.

This Credit card breach settlement covers but is not limited to clients’ expenses incurred when trying to identify a case of fraud, a debited amount not reversed performed by the fraudsters, and time lost as a result of trying to recover credit card data and all of this must be backed by evidence of a bank and other legal documentation.

While these laudable moves by most companies and firms have, in a way, alleviated the rate of fraudulent credit card breaches coupled with other security measures to protect customers’ data, scammers seem not to back down on the rate at which they take advantage of the technological advancement in committing forgery.

From accessing the dark web to source info to creating software that, at one click, could see the credit card of unsuspecting victims breached, the war against scamming is yet to be over, and the next section will highlight significant major credit card data breach that took place In 2023 and late last year.

Credit Card Data Breach 2023.

From CNP, Credit Card Skimming Fraud, and Even Account Take over, the types of credit card breach is endless. A detailed explanation of the highlighted point above is given below:

#1. Card Not Present(CNP).

Usually done online, this kind of credit card breach involves the accessing of an individual card number and expiration date to make online purchases; this is done either through the fraudster calling on the phone or using the internet to access faulty websites, hence the name Card not Present.

#2. Credit Card Skimming.

Prevalent amongst fake ATM galleries, supermarkets, and even fuel stations, your credit card is breached by a skimming machine that is planted into most payment devices, such that information from your credit card is copied when inserted into these devices. The skimming machine duplicates this data, and fraudsters exploit the details to dupe and clear victims’ accounts.

It is often advised to keep an eye out for the kind of ATM centers one uses their card in to avoid cases of a credit card breach.

#3. Account Take Over.

This happens when the hacker has had access to a victim’s credit card company’s account and altered the details one supplied to their credit card company; often, it could even involve obtaining virtual cards and bypassing the mail address billing system victims use. In carrying out the transaction, the only notification would be the debit alert whenever they carry out transactions.

It is best to consult with your bank(in case of a third-party card issuance) or with the credit card company for a breach to forestall other transactions.

With this knowledge of the types of credit card breaches, a little look at significant violations in the year 2023 and late 2022 would be the icing on the cake to wet our taste buds.

In no particular order, these breaches are known to have hit significant firms and small-scale organizations. They include:

#4. Chick-fil-A Credit Card Data Breach

On January 6th, the famous restaurant had hackers commit a massive breach of its customers’ information stored on their site. A slight oversight had hackers have access to confidential information of their clients, which included their credit card and social security numbers along with other details.

The company, on the other hand, issued a public statement informing customers to remove any credit card from their system while taking care not to reveal their login and credit card information.

#5. Ronin Credit Card Breach

This cryptocurrency giant, as of last year, had a massive breach that resulted in millions of dollars being wiped out from their system, leaving traders stunned and credit card wallets worthless. This also leads to the gigantic pumps of shit coins and the degrading value of their home coin.

#6. Microsoft

The giant Microsoft had its share of a data breach that almost had its client giving out their credit card information, thanks to an old employer who had access to the data of the company’s clients. The timely intervention of Microsoft engineers and the FBI had these perpetrators brought to book, with minimal damage to clients’ information and credit cards.

#7. Worm-hole

Another crypto company, as of September 17, 2022, had the hit when the slight glitch in this company’s node had a whooping sum of 300 million dollars cleared off their system.

This third-party crypto payment system served as a link between most crypto giants, acting as a payment gateway for users buying cryptocurrency and helping facilitate payment had a faulty node which hackers exploited in carrying out their sweeping.

Other big swipes include Twitter and even Facebook, as at one point, this social media giant reported cases of a breach, which had them warning its users to be wary in giving out credit card info.

This continuous breach constantly adds to the rising cost of most credit card breaches in ways that are somewhat complicated to ignore; the following section will cover the direct cost of credit card breach to individuals and firms attacked.

Direct Cost of Credit Card Data Breach.

Knowing that a lot goes on when a credit card is compromised, this effect has incurred costs in many ways. A credit card breach is something that anyone would prefer to avoid, both psychologically and economically.

The list below describes the direct cost of a credit card data breach to the parties involved:

#1. Financial Cost to Firm

It is better to prevent a credit card breach than to resolve one since it costs about $21,000 per day to fix a data breach with significant cooperation. Keeping in mind that most credit card breaches can last for months, multiply that by the cost of getting in a day, and you’re looking at millions of dollars in expenses.

#2. Reputational Damage.

Another direct cost to look at is the reputational damage the firm would face now and in the future. If a continuous system hack keeps happening, prospective clients would be discouraged from wanting to do business with such a firm.

Not only do these firms struggle to build public relations, but they would also have to deal with the advantage their competitors would have if they could provide security-worthy credit cards devoid of any breach.

#3. Direct Cost to Customers

Customers of firms who have in one way had to bear the brunt of a credit card breach from a company they do business with have also decried the slow and hard financial services they have to contend with, coupled with the identity theft and many legal processes they would have to deal with in their bank to secure their account. Indeed, having a credit card breach isn’t something to wish for.

What Happens When Your Credit Card is Compromised?

When a credit card is compromised, it means that an unauthorized user has gained access to your card details and if you don’t take the necessary actions, your funds will be cleared on too many purchases made by this user. the following steps are the necessary actions to take in this situation to help secure your funds:

Report to your card issuer to suspend the account and issue you a new card with a new number
Review recent charges
Update your accounts
Request for more details on the new card
Protect your card going forward

How Do Credit Cards Get Breached?

Credit cards can be hacked or comprised in many ways such as

Phishing emails or texts
Scam phone calls
Online shopping from an unknown source
Stolen wallets or lost credit cards
Hacking the payment systems for online stores
Trusting a friend with your card details
Stealing your card details over public Wi-Fi, and so on.

What Credit Card Companies Have Been Hacked?

Heartland Systems: 2009 (160 Million Cards)
TJX Companies: 2006 (94 Million Cards)
TRW/Sears:1984 (90 Million Cards)
Capital One:2019 (106 Million Customers Exposed)
British Airways: 2018 (380,000 card payments were compromised)
Orbitz: 2017(880,000 credit cards)
Panera: 2017(37 million customers were affected)

Conclusion

Credit card data breaches have been a long-standing issue since the invention of electronic payment systems, and the outlook of it disappearing is still bleak. However, it is not all gloom and doom, as with the proper practices and caution, protecting your data becomes more accessible.

This article has done well to elaborate on the safety precautions to adopt in protecting one’s credit card from any data breach.