Credit Card Breach at Buckle Stores

The Buckle Inc., a clothier that operates more than 450 stores in 44 U.S. states, disclosed Friday that its retail locations were hit by malicious software designed to steal customer credit card data. The disclosure came hours after KrebsOnSecurity contacted the company regarding reports from sources in the financial sector about a possible breach at the retailer.

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On Friday morning, KrebsOnSecurity contacted The Buckle after receiving multiple tips from sources in the financial industry about a pattern of fraud on customer credit and debit cards which suggested a breach of point-of-sale systems at Buckle stores across the country.

Later Friday evening, The Buckle Inc. released a statement saying that point-of-sale malware was indeed found installed on cash registers at Buckle retail stores, and that the company believes the malware was stealing customer credit card data between Oct. 28, 2016 and April 14, 2017. The Buckle said purchases made on its online store were not affected.

As with the recent POS-malware based breach at Kmart, The Buckle said all of its stores are equipped with EMV-capable card terminals, meaning the point-of-sale machines can accommodate newer, more secure chip-based credit and debit cards. The malware copies account data stored on the card’s magnetic stripe. Armed with that information, thieves can clone the cards and use them to buy high-priced merchandise from electronics stores and big box retailers.

The trouble is that not all banks have issued chip-enabled cards, which are far more expensive and difficult for thieves to counterfeit. Customers who shopped at compromised Buckle stores using a chip-based card would not be in danger of having their cards cloned and used elsewhere, but the stolen card data could still be used for e-commerce fraud.

Visa said in March 2017 there were more than 421 million Visa chip cards in the country, representing 58 percent of Visa cards. According to Visa, counterfeit fraud has been declining month over month — down 58 percent at chip-enabled merchants in December 2016 when compared to the previous year.

The United States is the last of the G20 nations to make the shift to chip-based cards. Visa has said it typically took about three years after the liability shifts in other countries before 90% of payment card transactions were “chip-on-chip,” or generated by a chip card used at a chip-based terminal.

Virtually every other country that has made the jump to chip-based cards saw fraud trends shifting from card-present to card-not-present (online, phone) fraud as it became more difficult for thieves to counterfeit physical credit cards. Data collected by consumer credit bureau Experian suggests that e-commerce fraud increased 33 percent last year over 2015.