Sears Holdings Corp. Detects Month-Long Data Breach At Its Kmart Stores

By Staff Reporter | Oct 11, 2014 08:44 AM EDT

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On late Friday, Sears Holdings Corporation announced that it detected a month-long data breach at its Kmart stores that affected certain customers' credit and debit cards. Kmart is the latest victim in a series of hack attacks that have hit several big retail companies in the United States.

As stated by Forbes, Kmart revealed that an undisclosed number of credit cards information was stolen in a month-long data breach which started in early September. Kmart is a subsidiary of Sears Holding Corporation.

According to a Securities and Exchange Commission filing on Friday, the data breach was discovered by the IT team of Kmart on Oct. 9, Thursday. The commission's specialists believed that Kmart's payment data systems were hit with malicious software that was undetectable by current anti-virus systems. However, the company said that it was able to remove the malware.

As per NBC News' report, Kmart is not the only retail company that was affected by a series of hack attacks lately. Other big US retail companies that were struck by the breach were JPMorgan Chase, Dairy Queen, Target, Supervalu, Home Depot and Neiman Marcus.

Kmart is dealing with another fresh blow caused by the recent hack attack. As reported by USA Today, the data theft comes at a time when the company is struggling with losses and sales falloffs amid rising concerns about its vendors' willingness to stick with the struggling retailer.

The Wall Street Journal said that according to a Sears' spokesperson Chris Brathwaite, who declined to give details on how many credit and debit cards were affected, said that the data breach didn't affect Kmart.com or Sears stores or their Web sites. Sears also said that Kmart launched an intensive investigation and is working with a leading security firm.

The company also added that Kmart is working with federal law enforcement authorities and banking partners while the probe is ongoing. In addition, Kmart is implementing more advanced software to ensure customer's information.

Yahoo News reported that the US Secret Service confirmed that it was investigating the breach, which happened early September and compromised Kmart's systems. Kmart has over 1,000 stores across the United States. Security authorities said they were not surprised to learn that another major retail company was reporting a data breach. They believe that several big retailers do not have sufficient systems for detecting cyber hack attacks, which means they still remain an easy target for hackers.

In line with the data breach, Sears said that it will be providing free credit monitoring protection for those customers who shopped with a credit or debit card in its Kmart stores during the month of September through Thursday. It also stressed that according to the policies of most credit card companies, the customers have no liability for any unauthorized charges if it was reported in a timely manner.

Emphasizing issues about finances, Sears has lost about $1 billion in the first half of its fiscal year and has twice turned to CEO Edward Lampert, who has been closing stores and slashing costs to try to return to profitability. The company has been struggling to nine consecutive quarterly losses.

Kmart's data breach was an added burden on Sears' bad week, whose stock has fallen sharply. Meanwhile, through a statement, Kmart's President Alasdair James apologized for any inconvenience that the incident has cause its members and customers.

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