Costco Hit by Credit Card Breach — What You Need to Do

Costco Hit by Credit Card Breach — What You Need to Do

Updated details on the number and location of affected Costco stores.

At least one Costco retail warehouse has suffered credit card theft, and the company warns customers to be vigilant.

"You are receiving this letter because your payment card information may have been compromised," Costco's letter, dated November 5, states. This notification letter was first seen by Bleeping Computer.

"We recently discovered a payment card skimming device at a Costco warehouse you recently visited. Our membership records indicate that you made a purchase by swiping your payment card at the applicable terminal at a time when this device may have been active."

Costco's letter does not indicate which Costco warehouse or warehouses may have been affected, but the letter is signed by the vice president of Costco's Midwest operations. It is unclear how many Costco members were affected.

The letter warns that fraudsters "may have obtained the magnetic stripe (data) of your payment card, including your name, card number, card expiration date, and CVV (card verification value). Such information can be used to "clone" your card using the duplicated magnetic stripe data.

Payment card skimmers are devices that illegally obtain information on a card. The skimmer is often attached to the payment card reader (aka PIN pad) in legitimate retail stores without the clerk's knowledge, and is usually so cleverly attached that one has to look closely to see that nothing is wrong.

"This incident was uncovered as a result of a routine inspection of the PIN pads by Costco personnel," the letter states.

The company is offering affected customers free identity theft protection for one year from IDX, a company that specializes in such services. Those who receive the notice can sign up by callinghttps://app.idx.us/account-creation/protectまたは 1-800-939-4170 using the registration code at the top of the notice (through February 5, 2022).

Those who receive the letter are encouraged to enroll in an IDX plan. In general, the risk of full-blown identity theft from stolen credit card numbers is low, but it can't hurt.

However, we recommend that you contact your credit or debit card issuer immediately upon receiving the Costco letter. For debit card holders, this can be as short as two business days, but doing so in a timely manner can spare you from significant losses due to unauthorized charges, which usually cost less than $50.

Costco customers who have not received such letters should also check their recent credit card statements for possible fraudulent charges. Also, in general, payment terminals should use chip card readers rather than magnetic stripe readers. The chip card method is much more secure and less likely to result in card number theft.

Costco later told ZDNet that card skimmers were found at four Chicago-area warehouses in August and that fewer than 500 customers were affected, all of whom were notified and offered free identity theft protection services. No skimmers were found at the other warehouses.

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