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Breach Bingo: The 5 Post-Denial Stages

posted on: Wed Oct 15 2014

Dairy Queen. Kmart. Home Depot. Another day brings another breach. And even if you don’t review millions of transactions per day, you may notice some common communication trends from the victimized companies. So much so, that you can mark off the different phases similar to a favorite board game as companies identify what was stolen, who was impacted, how it happened and the appropriate response to all stakeholders. And if you do want to play breach bingo, we have some pre-made cards ready for you.

While we don’t want to make light of lost data or the impact it ultimately has on all online retailers and payment processors, here are the most common milestones we see:

  • “We think we may have a problem…” — Consider this the moment of realization. Someone in IT discovers unauthorized entry into the company network, ranging from basic customer and account information to financial details, all of which can be easily turned into money on the black market.
  • “Yes we have a breach, but we don’t know how it happened.” — Somewhere between transparency, goodwill and legislated disclosure requirements, this signals to customers and shareholders that bad news is coming but the investigation is ongoing. Brace for impact.
  • “The breach only impacted small percentage of overall accounts.” — Often wishful thinking on the company’s part, which is usually followed by…
  • “We’ve discovered it impacted the majority of accounts during this timeframe” — The truth comes out, the band-aid is ripped off and internal teams continue to triage a challenging situation, which leads to:
  • “Here’s what we’re doing to ensure this never happens again…” — the official announcement of the proactive steps the company is taking to protect its customers and ensure their data is never compromised again. These steps may include one or more of the following:
  1. Termination of current security leader
  2. Hiring of new security leader (a virtually guaranteed step when no notable figure was in place before the breach)
  3. Announcing the formation of a dedicated cybersecurity team
  4. Paying for services to protect impacted customers anywhere from three months to a year. Ironically, many offer Experian monitoring services despite that company’s own breach in March of this year.

Data BreachCertainly a breach is no laughing matter, as it weaponizes customer data that threatens all online retailers – not just the ones that have been breached.

So how can you protect your business from being victimized by the latest haul of breached information? Start by making sure your fraud solution analyzes all of the variables in a transaction that could indicate fraud – whether its one email address linked to 20 credit cards, twenty email addresses using the same credit card, or one device with access to 40 different payment types. Once stolen credit card or other account information is on the market, fraudulent behavior picks up quickly and the right solution can identify these threats quickly.

One of the many features of Kount Complete is order linking, which takes all of the above variables and more into account during every transaction. This is one component that informs our Kount Fraud score, a predictive model that helps you determine the risk of every transaction in milliseconds. In many cases this capability can even stop a transaction that may have been approved before a credit card was deemed stolen – saving you lost product before it gets shipped.

To understand how order linking works sign up for a free demo of Kount Complete and learn more about how the Kount Fraud Score can bolster your bottom line.