Michaels Alerts Customers of Potential Debit and Credit Card Fraud

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Michaels Stores, Inc. has learned that PIN pad tampering may have occurred in its Chicago-area stores and that customer credit and debit card information may have been compromised.

The offender or offenders most likely committed the crimes by tampering with the PIN pads at store checkout counters where customers swipe their cards and punch in their account codes. Offenders who get card information can then go to an ATM and withdraw money from the debit card’s bank account.

Michaels was contacted earlier this first week of May 2011 by banking and law enforcement authorities after multiple fraudulent debit card transactions were reported over the weekend of April 30 and May 1, 2011. Multiple customers of Michaels craft stores in the Chicago area reported unauthorized funds withdrawn from their bank accounts.

Authorities throughout Chicagoland confirmed that the offenders stole money from many bank accounts via out-of-state ATMs. Withdrawals are being made out of state, including in California and Nevada. The victims all shopped at a Michaels in Chicagoland, and most reported having exactly $503 stolen — a $500 withdrawal, including a $3 cash machine fee.

Victims reported problems after making purchases at Michaels, including stores in Bloomingdale, Burbank, Chicago, Glenview, Hoffman Estates, Mount Prospect, Naperville, Niles, and Vernon Hills. Michaels has 35 stores in Chicagoland.

The Bloomingdale Police Department is investigating at least 16 reports of fraud involving Michaels customers. Vernon Hills and Naperville police and other police agencies have reports of about a dozen cases each.

Michaels was first contacted about the breaches late Monday, May 2, 2011.

Customers who purchased items from a Michaels with a debit or credit card are urged to monitor their statements, report suspicious account activity and change debit card PINs and other account security settings.

Security experts and law officers advise consumers to inspect PIN pads, especially at remote locations such as ATMs and gas stations.

ATM cash withdrawals have been occurring only in recent days, but apparently the fraudulent capture of information during purchases at Michaels goes back to as early as December, 2011.

Banks protect customers from credit card fraud, but debit card crime is typically more difficult because money is withdrawn from a victim’s bank account and they must provide proof to get their money in their account returned.

Discount grocer Aldi experienced similar cases last year in which offenders placed their own payment card terminals in some stores.

The U.S. Secret Service began is also involved in the investigation.


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