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TheStreet Open House

5 Takeaways From the Target Security Breach

NEW YORK (TheStreet) -- It's not easy being a target these days, as one of the word's most recognizable retail brands is finding out the hard way.

Target, the Minneapolis-based shopping store chain, is feeling the heat after its announcement last week that 40 million of its customers had their credit and debit card data exposed to identity thieves.

Aside from leaving customers feeling anxious and frustrated over the deal, the breach has triggered a major hit to Target's credibility, image and store sales. Here's a look at some of the biggest takeaways from the Target tsunami:

You can't confine the dangers. With some of its debit and credit cards identified as at risk because of the security breach, JP Morgan Chase placed temporary limits on consumer ATM withdrawals and retail purchases. Daily withdrawal limits got a ceiling of $250 at ATM machines and $1,000 for purchases. Chase advised customers who need more cash for withdrawals and purchases to visit a bank branch, where more funds could be withdrawn subject to teller approval.

Shoppers aren't happy. Consumer perception of Target has fallen off a cliff in the past week. A survey by YouGov shows the retailer has a monumental public relations nightmare on its hands:

YouGov BrandIndex's Buzz score ranges from 100 to -100 and is compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback.

Target's Buzz score for the week leading up to the data breach announcement was 26. One day later, it was -9, representing a drop of 35 points. Today, the Buzz score is -19, making the drop now 45 points. Since June 2007, the lowest Buzz score Target has ever received was around positive 10.

Legal headaches will follow. Lawsuits have already been filed in California and Oregon by consumers saying Target failed to implement and maintain reasonable security procedures. Expect more suits as more state attorney generals' look into the breach.

A federal investigation could follow. Congress could be taking aim at Target, with some lawmakers already calling for an investigation into the company's role in its own data breach. Connecticut Democrat Sen. Richard Blumenthal is urging the Federal Trade Commission to dig deeper. Citing a "breach of trust," Blumenthal says in a Dec. 22 letter to the FTC that the agency "has the authority and responsibility to investigate and address this kind of event, and I urge you to look into this case immediately."

The store has to make amends. Target offered free credit monitoring services to customers, a 10% shopping discount from Dec. 20-22 and assured shoppers they won't lose any money from the data security collapse."To date, we are hearing very few reports of actual fraud, but are closely monitoring the situation," in a statement released Dec. 20. "We want to reassure guests that they will not be held financially responsible for any credit card or debit card fraud," Target said Friday.

Expect more negative buzz, as Reuters reported Wednesday that identity thieves have cracked the security encryption codes of bank customer PINs, leaving Target consumers' bank accounts vulnerable to theft.

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