Target Scandal Analysis, Essay Example

How the mighty have fallen. Once considered one of the most ethical corporations in the world, they have been indulged in a serious security breach that has affected over 100 million customers in just under a month.  With each new day more and more details are emerging on the breadth of the Target data breach. Throughout several high profile scandals, much is not prematurely known to the public until authorities and analyst start to pick apart the scandal. Ethics is a serious issue and should be a primary objective in businesses.It has become nearly impossible to read the news without hear of companies involved in some type of scandal where unethical decisions were made.When money is involved, ethics seems to go out the window, and corporate politics takes over that in the end harms the consumers and business. Within this paper, it will provide an analysis of the Target data breach scandal, and discuss the possible ethical implications that will most likely haunt the billion dollar corporation.

The Target Corporation scandal that developed in December of 2013, has not died down. On December 18, 2013,it was announced by security expert Brian Krebs that 10 credit card issuers were investigating a potentially major data breach that involved millions of customers debit and credit card information at Target. (Krebs, 2013). It was only then that Target put out a press release to confirm the data breach the next day. The damage was that between the dates of November 27^th and December 15^th, Target data systems were hacked by overseas criminals. The initial reports that Target released was that it stole over 40 million customer’s information that included CVV security codes, expiration dates, and card numbers. Target initially denied that hackers were able to get PIN data, but after contradicting reports, Target revealed that hackers were able to steal PIN data information, even though the data is encrypted. (Press Room, 2013) It took much more prodding into the situation from outside experts to also let known that the number initially reported of 40 million customers by Target, was largely misrepresented, as the number ballooned to over 110 million customers. (Rosenblum, 2014) What was also revealed that Target did not initially disclosed is that customer personal information that includes, phone numbers, email address, home addresses, and customer names were also stolen from the same database. (Rosenblum, 2014) It was recently discovered that the main culprit was a 17 year old Russian teenager apart of a larger cyber intelligence group, IntelCrawler, which was able to hack into the database using a BlackPOS malware used to gain access to point-of-sales terminals. “The malware was designed to capture payment card data from the magnetic strip of credit and debit cards prior to encryption within our system.” (Spencer, 2014) The group has hinted that there have been other major corporation data breaches with only Michael’s and Niemen Marcus disclosing with the outing of Brian Krebs again. Others that have been affected have remained silent, but it is only a matter of time before those companies are found out.

The problem lies in about the security breach disclosure ethical decision or dilemma of the Target and other companies.  Niemen Marcus as well as Target knew well before hand of the data breaches. Niemen Marcus was hacked in July 2013, but did notdiscover the problem until mid-December, and did not disclosed the situation until mid-January. (Newman, 2014)  Target however, knew of the data breach in the beginning of December, but waited until they were outed to disclose the data breach. “The company moved quite slowly on this breach,” reported John Biggs for TechCrunch on the same day as Target’s official announcement regarding the crisis.” (Burg, 2014) Target reported that after discovering the breach, they took three days to confirm the presence of malware and removed it, and then informed the credit card and payment processors, fixed their registers, and prepared their employees for customer inquiries. (Spencer, 2014) Although Target ensures they spend hundreds of millions of dollars on security, they did not know of the breach until the Justice Department alerted them to suspicious activity. However, Target still waited until January to begin notifying customers and more importantly those that shopped within the designated times of the massive security breach. This was a month after reports were made about the data breach publically. The criticism is from consumers that feel that Target waited long to disclose because they did not want to undermine the peak holiday season shopping, and the disclosure did not state the full damage of the data breach.

This brings in the issue of disclosure laws. “Forty-six of 50 U.S. states have passed laws requiring disclosure, starting with California in 2002, but the laws vary in terms of when and how notice must be given, and most states allow for delays to investigate the intrusion.” (Freifeld, 2014) This means that companies do not immediately have to disclose problems that affect customers, but when other sources breaks the news first it creates a lose-lose situation. Target was behind with the news, and to make matters worse, their customer service was inadequate. Lines of customer service were gridlock, and the banner placed on the website was ridiculously small to see. The poor response from the company, left the door wide open for scammer that were contacting customers. (Burg, 2014)  In order to protect their sales, it seems that Target delayed informing customers over the holidays when they knew about the data breaches. Even though denies delaying the announcement because of holiday sales, they are being sued in several class lawsuits that are looking to determine if Target is at fault. Target mishandled the scandal, and made unethical decisions in not notifying the public sooner, or handling the problem in a more adequate way. The decisions made by executive have come with consequences as their sales and revenue have taken a hit since the data breach discovery. More and more information is coming to light, and Target is working overtime in order to mitigate the scandal for the sake of future of their company.

References

Burg, Natalie. (2014). Five Lessons For Every Business From Target’s Data Breach. Forbes. Retrieved from http://www.forbes.com/sites/sungardas/2014/01/17/five-lessons-for-every-business-from-targets-data-breach/

Freifeld, Karen. (2014). U.S. companies allowed to delay disclosure of data breaches. Reuters. Retrieved from http://www.reuters.com/article/2014/01/16/us-target-data-notification-idUSBREA0F1LO20140116

Krebs, Daniel. (2013). Sources: Target Investigating Data Breach. Krebs on Security. Retrieved from http://krebsonsecurity.com/2013/12/sources-target-investigating-data-breach/

Newman, Lily Hay. (2014). A 17-Year-Old Was Behind the Target, Neiman Marcus Credit Card Hacks. Slate. Retrieved from http://www.slate.com/blogs/future_tense/2014/01/20/target_neiman_marcus_credit_card_number_hacks_were_caused_by_a_17_year_old.html

Rosenblum, Paula. (2014). The Target Data Breach Is Becoming A Nightmare. Forbes. Retrieved from http://www.forbes.com/sites/paularosenblum/2014/01/17/the-target-data-breach-is-becoming-a-nightmare/

Spencer, Jim. (2014). How long did Target wait before telling customers?St. Louis Today. Retrieved from http://www.stltoday.com/business/local/how-long-did-target-wait-before-telling-customers/article_e91353cf-970e-5263-8373-38910e63e147.html