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Credit Card Applications » News » Other » Twenty States Hit by Debit Card Fraud in Michael’s Stores

Twenty States Hit by Debit Card Fraud in Michael’s Stores

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Twenty States Hit by Debit Card Fraud in Michael’s Stores

Shopping for craft supplies at the local Michael’s in Illinois was recently a slap in the face for some debit card and credit card users. As April turned into May, Michael’s released an announcement that its card processing machines were tampered with throughout its Illinois locations. The tampering exposed personal debit and credit card information to thieves. Further investigation into the matter reveals that the problem is worse than initially thought.

The Damage Spreads

Originally, Michael’s thought the incident was isolated to its Illinois locations, primarily the Chicago area stores. Now, Michael’s has discovered that the fraud has touched 20 states throughout the country. The states involvedinclude Washington, Illinois, Virginia, Colorado, Utah, Ohio, Delaware, Rhode Island, Georgia, Pennsylvania, Oregon, Iowa, Massachusetts, New York, Maryland, North Carolina, New Hampshire, Nevada, New Jersey and New Mexico.

During the investigation, 90 keypads out of its 964 store locations showed signs of tampering. Michael’s plans to remove and replace approximately 7,200 keypads to ensure that there are not any additional problems with fraud. The problem was first brought to the attention of the corporate office when some of the banks issuing the cards contacted the craft supplier giant to report customer complaints of fraudulent activity in their bank accounts.

How it May Have Happened

If the problem occurred in one or two locations, the task of pinpointing the source of the fraud would be easier. With such a widespread dilemma, Michael’s is not sure how this happened. One theory from a source outside the retailer is that someone posing as a worker for a terminal repair company came into the stores and either tampered with the existing PIN pads or replaced the terminals with units that would divulge the credit and debit card information to the scammers.

The primary issue with the breach of debit card information is how little stands between cardholders and thieves. Once crooks have the debit card numbers and PINs, they can compromise bank accounts, giving them direct access to consumers’ hard-earned cash.

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