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Credit Card Hack Could Cost $80 Million in Illinois

A massive credit card breach at a Missouri-based grocery store chain could end up cost $80 million in Illinois alone, according to a court motion filed last week. So far, at least three lawsuits seeking class action status have been filed against Schnucks Markets, Inc., alleging a breach that has affected 2.

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4 million cards used at 79 stores between early December and late March.

As the St. Louis Dispatch reports:

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.

In its motion, filed Friday, Schnucks puts a figure on this effort, saying that an estimated 1.6 million card transactions took places at its 23 Illinois stores during the breach period, representing 500,000 unique cards — about one-fifth of the cards compromised in the breach overall.

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Plaintiffs argue that state law in Missouri and Illinois says that any store that stores personal data relating to customers must notify those customers as soon as the store becomes aware of a breach. Schnucks, however, says that the data stolen from customer credit cards included card numbers and expiration dates, not names, meaning they were not required to notify victims. It can be said that this looks bad on Schnucks — customer service-wise and reputation-wise.

The case is likely to head to the U.S. District Court for the Southern District of Illinois.

Relatively speaking, $80 million is nothing compared to, say, the Heartland Payments Systems security breach of 2008, which resulted in the theft of information from more than 100 million credit and debit cards and a 20-year prison sentence for the perpetrator. But even that doesn’t compare to this list of the top five most expensive data breaches.

Heartland Systems Hacker Sentenced to 20 Years

Albert Gonzalez was sentenced Thursday in U.S. District Court to 20 years in prison for his role in what is known as the largest data breach incident in history. Gonzalez and his crew hacked the computers of retailers such as TJ Maxx, Office Max, DSW and Dave and Buster’s (who used Heartland Systems card processing systems), stealing more than 90 million debit and credit card numbers.

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The sentence for the largest computer-crime case ever prosecuted is the lengthiest ever imposed in the United States for hacking or identity-theft. Gonzalez was also fined ,000.

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Restitution, which will likely be in the tens of millions, was not decided Thursday.

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Before the sentence was pronounced, Gonzalez told the court he deeply regrets his crimes, and is remorseful for having taken advantage of the personal relationships he’d forged. “Particularly one I had with a central government agency … that gave me a second chance in life,” said the hacker, who had worked as a paid informant for the Secret Service. “I blame nobody but myself.”

Albert Gonzalez will spend the next several years behind bars for his role as the mastermind behind the largest computer-crime case ever prosecuted.

Albert Gonzalez will spend the next several years behind bars for his role as the mastermind behind the largest computer-crime case ever prosecuted.

Heartland Hacker Pleads Guilty

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You remember the January 2009 data breach of Heartland Payment Systems that exposed 130 million personal records, right? You should — it was the largest data breach of all time.

To give you a little background, Heartland Payment Systems processes 100  million credit and debit card transactions per month for 175,000 merchants. In late 2008, a hacker accessed the computers Heartland uses on a daily basis, jeopardizing 130 million customer records.

And finally, after almost one year of investigations, officials charged 28-year-old Albert Gonzalez of Miami. He pleaded guilty to two counts of conspiracy to gain unauthorized access to the payment card networks operated by Heartland, among other payment processing companies. But this was not Gonzalez’s first run-in with the law for hacking-related activities.

Gonzalez pleaded guilty in September 2009 in Boston to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez also pleaded guilty in September 2009 in Boston to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster’s restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York.

Who knows where this cyber-scoundrel would have attacked next, had he not been caught. He faces sentencing in March for his crimes and will likely be sentenced to 17 to 25 years in prison.

Let’s take a look at the largest data breach incidents on record, listed by number of records breached, date and organizations affected.

[TABLE=7]

As hackers become more sophisticated, more pressure is put on IT risk managers. And with budgets tight and resources lacking, we will undoubtedly see our share of data breaches well into the future.

130,000,000 2009-01-20 Heartland Payment Systems
94,000,000 2007-01-17 TJX Companies Inc.
90,000,000 1984-06-01 TRW, Sears Roebuck
76,000,000 2009-10-05 National Archives and Records Administration
40,000,000 2005-06-19 CardSystems, Visa, MasterCard, American Express
30,000,000 2004-06-24 America Online
26,500,000 2006-05-22 U.S. Department of Veterans Affairs
25,000,000 2007-11-20 HM Revenue and Customs, TNT
17,000,000 2008-10-06 T-Mobile, Deutsche Telekom
16,000,000 1986-11-01 Canada Revenue Agency