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Secret Service Investigating Possible Michaels Card Data Breach

Michaels Stores has announced that it is investigating a possible breach of customer credit card data.

“We are concerned there may have been a data security attack on Michaels that may have affected our customers’ payment card information and we are taking aggressive action to determine the nature and scope of the issue,” said Chuck Rubin, CEO of Michaels Stores. “While we have not confirmed a compromise to our systems, we believe it is in the best interest of our customers to alert them to this potential issue so they can take steps to protect themselves, for example, by reviewing their payment card account statements for unauthorized charges.”

According to security blog KrebsOnSecurity, which broke the news of the recent Target security breach, Michaels is working with the Secret Service to to investigate a pattern of fraudulent card charges on cards that trace back to Michaels as a common point of use.

Michaels Stores customers should closely monitor any account that has been used at the store for potential fraud, and contact their bank or card issuer immediately if they suspect their card has been misused.

This is the second time in less than 3 years that Michaels has faced an issue relating to theft of customer card data. In early 2011, approximately 90 PIN pads (affecting less than 1% of the chain’s stores) were tampered with, resulting in the theft of customer data over a period of several months.

Fraud in the previous case was fairly limited, but the timing alone this time could be damaging to the company. Michaels Stores filed paperwork with the SEC last month indicating its intent to finally proceed in the near future with the IPO that it had postponed in 2012 after the stroke of former CEO John Menzer. Target, another recent victim of a customer card data breach, has suffered serious financial impact from the attack, and recently announced it is closing stores. A potential Michaels card data breach could definitely affect the value of the company’s IPO depending on its scale and what measures and costs are incurred by Michaels in dealing with it.


8 Responses to Secret Service Investigating Possible Michaels Card Data Breach

  1. Gab January 26, 2014 at 4:22 am #

    Yikes, I hope no-one loses any money

  2. Sheila Oxley January 26, 2014 at 11:58 am #

    Wow it’s getting bad. I hope everything turns out alright. We decided to use cash only, mainly to get control of our spending…so glad we are!

  3. Janet January 26, 2014 at 12:44 pm #

    Is this issue affecting the US stores or both US and Canada?

  4. Kim B January 26, 2014 at 6:09 pm #

    Last time Michael’s had a problem they got $1,800 out of our account. Since, then I only use cash at their stores.

  5. donna c January 26, 2014 at 7:34 pm #

    Another good reason to NEVER use your pin!!!

  6. Lauren January 26, 2014 at 7:35 pm #

    Hmm, I wonder how much they really ” believe it is in the best interest of our customers to alert them to this potential issue” , as I haven’t received any information from them, other than emails soliciting more business from me. I know that I have shopped in their stores at least once a month, and often more than that, for at least the last year, and I’ve had no contact from them warning me of this potential issue. I am very disappointed in Michaels, had I not been a subscriber of Scrapbook Update, I would be completely unaware. Many thanks to you, Nancy, none to Michaels.

  7. Debra williams January 26, 2014 at 7:43 pm #

    Went to target the other day and my gift card would not work. I gave them cash. I see cash in my future. And I agree with the post above, it will control spending.

  8. Mary Anne Perlmutter January 27, 2014 at 10:41 am #

    Thank you for the notice. I have been a customer of Michael’s for a long time and did not receive any notice of this breach. Nancy, thank you for always having the latest news and updates here on Scrapbook Update.

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