Scam of the day – March 11, 2016 – Possible Home Depot data breach settlement

A tentative settlement has been reached between Home Depot and the 56 million victims of its massive data breach which occurred between April and September of 2014.  The proposed settlement provides for a 13 million dollar fund to reimburse victims for out of pocket losses incurred  with an additional 6.5 million dollars being set aside for legal fees and other related expenses.  Shortly after the data breach, Home Depot announced that it would provide a year’s free credit monitoring through security company All Clear ID.  The offer was made to Home Depot customers who used their credit or debit cards at Home Depot between April 1, 2014 and September 9, 2014.  The proposed settlement of the class action brought by victims of the data breach must be approved by the judge overseeing the case.

Similar to the major data breach at Target which occurred a year earlier, Home Depot’s computers and credit card processing equipment was hacked when a third party party vendor’s computers were hacked thereby enabling the hackers to steal the passwords necessary for the third party vendor’s to access Home Depot’s computers.  As an additional part of the settlement Home Depot committed to make greater efforts at data security.

TIPS

As further developments in this settlement occur, I will inform you of those developments so if you were a victim of the Home Depot data breach, I will let you know what to do.  As for all of us, even if we were not a victim of this particular data breach, it is important to remember that we are only as safe as the places with which we do business that have the weakest security.  Greater implementation of EMV smart chip credit cards will reduce the effects of data breaches aimed at gaining credit card and debit card information, but many stores still have not shifted over to the new equipment required to process EMV smart chip credit cards.

Also, do not use your debit card for retail purchases.  Limit its use to ATMs.  There are strong laws to protect you from fraudulent use of your credit card, but the laws protecting you from liability in the event of fraudulent use of your debit card are not strong and you potentially risk losing your entire bank account to which the card is attached.  In addition, even if you report the fraudulent use of your debit card immediately, your bank will freeze your account while it investigates the breach which can be very inconvenient if you need immediate cash or have bills automatically paid from your account.