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Dave Olson, Published January 14 2014

Some banks reissuing cards hit in Target heist, others in wait-and-see mode

FARGO - Banks in the region are taking differing approaches to dealing with a security breach involving credit cards and debit cards used at Target stores over the holidays.

At least one local bank is identifying which of its customers’ debit or credit cards were compromised and issuing fresh cards immediately. Other banks are taking a watch-and-wait stance, with institutions taking action on a case-by-case basis if fraud is detected.

Bell State Bank & Trust is adopting the immediately-act approach, said Bill Russell, executive vice president of retail banking.

Russell said when Visa let Bell State Bank know which of its debit cards were put at risk during the data breach at Target, the bank decided to notify affected cardholders and issue them new cards.

Neither Bell State Bank nor any other bank contacted for this story would specify how many account holders may have been affected by the Target data heist. Russell said the number of Bell State debit cards affected by the breach is a small percentage.

“We’re very happy about that,” Russell said, adding that the decision to reissue some cards was a precautionary step and the company has seen no indication any compromised cards have suffered fraudulent transactions traceable to the data breach at Target.

Target initially reported that hackers had stolen credit card and debit card information connected to as many as 40 million customers who shopped at Target stores between Nov. 27 and Dec. 15. Late last week, Target issued additional information that another 70 million customers may have had personal information compromised, including names, phone numbers and email addresses.

Russell said State Bank & Trust is among the financial institutions that employ sophisticated anti-fraud software that is constantly evaluating debit and credit card transactions for suspicious activity.

Fraud-detection systems

Gate City Bank is relying on its anti-fraud software to deal with any potential problems arising from the Target breach, said Gate City Executive Vice President Maureen Jelinek, director of operations.

“We have a fraud-detection system that is an online, real-time system that monitors our customers’ card activity for unusual behavior,” Jelinek said.

“We’re confident in that system and at this time don’t feel there is a need to reissue cards,” said Jelinek, adding that they have replaced cards on a case-by-case basis.

“We have had some customers just contact us and would feel better having their card reissued, and we’ve done that,” she said.

The same goes for Wells Fargo, according to Stacie Schiller, a company spokeswoman.

Schiller said Wells Fargo is counting on its fraud-detection software to alert the bank to any credit card and debit card issues relating to the Target breach. She said if unauthorized transactions do occur, customers will not be out money if they notify the company in a timely manner.

Bank officials said anti-fraud software is extremely alert to unusual transaction activity, and card numbers associated with the Target breach will be given even more scrutiny.

In addition to those safeguards, Jelinek said Gate City customers can adjust their account settings to send them mobile alerts when, say, balances drop below a certain number, or transactions with large dollar amounts start showing up.

Stay vigilant

Bank officials said it is critical that consumers scrutinize bank statements for unauthorized transactions and stay vigilant about it.

“When these breaches have occurred, you can get a false sense of security,” Russell said, adding that while nothing sinister may show up right away, some thieves are patient.

“It (fraud) could turn up in a month, six months a year, 18 months. We’ve certainly seen that happen. It’s not uncommon at all,” Russell said.

Schiller said customers should also employ care when receiving text messages, phone calls, or other communications that claim to be from their financial institution and ask for things like Social Security numbers or account information.

Instead of relying on the contact information provided in the communication, Schiller said people should directly contact their institution with questions or concerns.

“Call the number on the back of your card, the number on your (bank) statement. Go into your local banking store. Go right to the source,” Schiller said.

Not uncommon

Computer hacking connected to credit cards and debit cards, like the data breach identified by Target, is not uncommon, according to Rick Clayburgh, president and CEO of the North Dakota Bankers Association.

“This is not the first time our banks have had to deal with a problem with a merchant, where there’s been a loss of information. This just happens to be quite large and brings it more to the attention of the public,” Clayburgh said.

According to Clayburgh, the banking industry spends a lot of money maintaining the integrity of the payment network and he said anti-fraud software employed by many banks is effective at spotting unauthorized transactions.

When that happens, he said, the card is usually shut down, and it remains unusable until any issues are cleared up. If fraud occurred, the card is closed and a new one issued to the customer.

In the case of the Target breach, Clayburgh said some banks are taking a blanket approach; reissuing cards to their entire customer base, while others are reissuing cards only in cases where a card was used at Target during the affected period.

In other cases, he said, banks are adopting the wait-and-see approach and working with customers to monitor activity on their cards.

“In all cases, our banks are communicating with their customers and just reminding them to make sure their credit card and debit card aren’t seeing unusual activity on them,” Clayburgh said.

Readers can reach Forum reporter Dave Olson at (701) 241-5555