Target Executive says Company Knew About Data Breach Days Before it Was Revealed

Executives including, from left: John Mulligan of Target, Michael Kingston of Neiman Marcus, Delara Derakhshani of the Consumers Union and Fran Rosch of Symantec take the oath before the Senate Judiciary Committee on Capital Hill in Washington, Jan. 4, 2014. (Credit: Stephen Crowley)
Executives including, from left: John Mulligan of Target, Michael Kingston of Neiman Marcus, Delara Derakhshani of the Consumers Union and Fran Rosch of Symantec take the oath before the Senate Judiciary Committee on Capital Hill in Washington, Jan. 4, 2014. (Credit: Stephen Crowley)

An executive of Target Corp. said Tuesday the retailer has taken actions to shore up security following the massive breach of millions of consumers’ data during the holiday season.

The testimony at a Senate hearing by John Mulligan, executive vice president and chief financial officer at the No. 2 U.S. discounter, also revealed that Target discovered an additional 25 cash registers infected by malicious software on Dec. 18. The company had said earlier that it had removed all the malware from its system by Dec. 15.

Mulligan’s testimony before the Senate Judiciary Committee was the first public appearance by a Target executive addressing the issue since the breach that occurred between Nov. 27 and mid-December. An estimated 40 million credit and debit card accounts were affected.

Mulligan said Target is “deeply sorry” for the effect of the data theft on consumers, and he acknowledged that their confidence in the Minneapolis-based company has been shaken.

Sen. Patrick Leahy, D-Vt., the panel’s chairman, said the erosion of consumers’ confidence — with data breaches on the rise affecting retailers, Internet companies and others — could hinder the U.S. economy’s recovery.

The recent data hackings at Target, luxury retailer Neiman Marcus and arts-and-crafts chain Michaels Stores “compromised the privacy and security of millions of consumers,” Leahy said.

Senators pressed Mulligan and Michael Kingston, senior vice president and chief information officer at Neiman Marcus Group Inc., about how quickly they notified customers of the breaches.

Mulligan said Target executives were told on Dec. 12 by the Justice Department of suspicious activity involving payment cards. The company started an investigation, removed malware and publicly announced the data theft on Dec. 19.

A processing firm told Neiman Marcus of a problem on Dec. 13, and the company’s investigators made a report on Jan. 2, Kingston said. Customers were notified on Jan. 10. The malware causing the breach appeared to have been operating in many Neiman Marcus stories between July and October, Kingston testified.

An estimated 1.1 million accounts were affected.

SOURCE: MARCY GORDON
ASSOCIATED PRESS

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