Updates on the effects of Home Depot (NYSE:HD) National Security Breach

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By Joseph Carducci on September 23, 2014 Consumer Staples

One of the largest retailers for home improvement supplies has finally released information regarding the damage that the security breach of their payment system has caused. More than 55 million of individual’s debit and credit cards were compromised, in 1,157 locations in Canada and the United States. This huge number is said to rank among the top three security breaches to hit retail stores.

In the most recent press release, Home Depot (HYSE:HD) admitted that this criminal security invasion lasted for six months – from April till September of 2014. Home Depot (HYSE:HD) is now confident that all malware, which invaded their payment system, has been removed, and a new updated encryption device has been added to all locations in the United States. This new encryption method takes credit and debit card information and scrambles the personal data, so that it is virtually unreadable to criminal hackers.

Canadian-based Home Depot (HYSE:HD) locations will not be privy to this new safety technology for several more months. It was believed that these stores were less vulnerable to virtual criminal activity, because they had special check out terminals, known as chip and pin terminals. It has been estimated that approximately four million cards have been comprised in Canada, but Home Depot (HYSE:HD) will not confirm this number.

Home Depot (HYSE:HD) did say, in the latest press statement, that stores located in Mexico have not been comprised or hacked, and that there has been no criminal evidence; that customers who have shopped at HomeDepot.ca or HomeDepot.com have been affected by this security breach.

It is common practice for a retail establishment to offer an identity protection service, free of charge for 12 months, to their customers. This type of service usually includes monitoring of credit card activity for customers, who use and prefer this method of payment.

Brian Krebs, a reporter for the Washington Post, and the author of a website, known as “Krebs on Security”, first reported this Home Depot (HYSE:HD) security breach on September 02, 2014, and it was confirmed that a large amount of stolen debit and credit card numbers went on sale, underground, of course.

Stolen credit and debit cards usually sell on the black market for an average price of $25 each, although the range can be from $10 to $55 for one stolen number. A debit card that has expiration date of 30 days or sooner can sell for $2.25. Company-based credit cards and Platinum MasterCard are considered to be the most desirable amongst thieves.

There is significant evidence that points to a group of Ukrainian and Russian hackers; that are responsible for this criminal invasion. This same crime ring may also be responsible for the security breaches that occurred at P.F. Chang’s, Sally Beauty Supply and Target stores.

I’m sure we all appreciate the fact that Home Depot (HYSE:HD) is sorry for the stress, anxiety and inconvenience that their customers had to endure, and that they take security measures seriously. But in the wake of this major theft, that affected thousands of individuals, a little honesty would be nice – such as: we at Home Depot (HYSE:HD) value our customers, and although we do our best to keep your credit card data safe, we messed up and failed. We sincerely apologize and will do better starting today.

The Home Depot (HYSE:HD) stock opened at 91.79 this morning and by 11:00am EDT is was holding at 91.90. The 52 week range for Home Depot (HYSE:HD) is between 7.74 and 93.75.