The Truth About the Target Breach: Consumers Aren’t Liable

The big security news of the day is that U.S. retail giant Target had a massive in-store data breach that compromised the information of 40 million credit and debit card customers.

It’s a bad situation and one that triggers a lot of fear, uncertainty and doubt (FUD). Target customers are obviously concerned that they could lose money, but the simple reality of this situation is this: The credit card system is set up to deal with fraud.

Credit card giant Visa contacted me earlier today to emphasize that fact. “All major card brands (including Visa) offer their cardholders zero liability,” a Visa spokesperson told me.

That is to say, that since Visa (and other credit card issuers) is aware of this breach, the risk isn’t catastrophic, such that attackers will run up consumers’ credit cards at will, bankrupting unsuspecting consumers without any recourse or defense.

“When such incidents occur, Visa works with the breached entity to provide card issuers with the compromised accounts so they can take steps to protect consumers through fraud monitoring and, if needed, reissuing cards,” Visa said in a publicly released statement. “Because of advanced fraud-monitoring capabilities, the incidence of fraud involving compromised accounts is actually rare, and Visa fraud rates remain near historic lows.”

Of course, vigilance is always the best defense, and all credit card users, regardless of whether they shopped at Target or not, should always monitor their statements, looking for suspicious and incorrect transactions. That’s just good common sense.

If and when a bad or fraudulent transaction does appear, the credit card companies have well-established processes for dealing with it and ensuring that the cardholder is protected. The fundamental concern here is trust, and the major credit card issuers all want consumers to use their credit cards and trust the integrity of the system.

So while there will be costs to bear from the Target breach, consumers won’t directly bear the brunt of that cost. Inevitably though, as Target completes its own forensic investigation and gets assistance from law enforcement, there will be costs that Target will pay. Whether or not Target passes those costs on to consumers in the form of higher prices will be a question only time can answer.

Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.