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Shares of the leading home improvement retailer, Home Depot Inc. ( HD ), fell nearly 2.1% after the company confirmed a breach of its payment data systems. The breach is likely to impact customers who have used payment cards at more than 2,000 Home Depot stores across the U.S. and Canada.
After a week's investigation, Home Depot yesterday confirmed that hackers broke into its payment systems at stores, therefore the privacy of shoppers who have used their credit or debit cards at the stores since April this year might be at risk. However, the company added that customers who shopped at its Mexico stores and online at HomeDepot.com were spared.
Furthermore, the company suspects that debit card personal identification numbers (PINs) were not passed on, though it is still in the process of determining the full scope, scale and impact of the breach.
The company began its investigation last week, after receiving calls from its banking partners and law enforcement regarding the data breach. The company's internal IT security team has been working with leading IT security firms, its banking partners and the Secret Service to get hold of the situation, since.
The breach was first reported by security blogger Brian Krebs, who sighted an attack of malware on Home Depot's systems that had hacked Target Corp's ( TGT ) systems last year. In Target's massive data breach issue, last year before Christmas, hackers had robbed about 40 million credit and debit card numbers and personal information of nearly 70 million customers.
Sources believe that Home Depot's data breach could probably be the largest in the history, while Target's breach being the second-largest so far, considering the time period it involves. Unlike the breach at Target that was brought to notice within just three weeks of its occurrence, Home Depot's data hacking went unnoticed for about five months.
Apart from Target and Home Depot, other companies, including U.P.S. ( UPS ), Goodwill, P. F. Chang's, Sally Beauty ( SBH ), Michael's and Neiman Marcus, have faced system hacking issues in this time of increased security threats from hackers.
A recent report, by the Department of Homeland Security and the Secret Service, reveals that over 1,000 businesses in the United States had been infected with malware that is programmed to drain off payment card details from cash registers in stores.
To counter this threat and provide more security to its customers, retailers have teamed up with banks and card companies by steadfastly adopting microchips into U.S. credit and debit cards, in order to make transactions more secure. In this context, Home Depot revealed that it is on track to roll out "Chip and PIN" technology to all U.S. stores by the end of this year, ahead of the Oct 2015 deadline established by the payments industry.
Additionally, in order to help customers, affected by the breach, this Zacks Rank #2 (Buy) company is offering free identity protection services and credit monitoring for any customer who has used a card in one of its stores, from April this year.
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Home Depot (HD) Falls on Confirmation of Security Breach - Analyst Blog
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