Is the Barnes & Noble Breach By The Same Gang That Hit Michaels, Aldi and Hancock Fabrics?

Written by Frank Hayes
October 24th, 2012

Barnes & Noble’s announcement on Wednesday (Oct. 24) of PIN pad breaches in 63 stores sounds eerily like last year’s breach at Michaels, the 2010 Aldi breach and the 2009 Hancock Fabrics breach. In each case, PIN pads were physically compromised, one per store, in dozens of stores clustered in specific geographic areas. The PIN pads were apparently tampered with during the spring and summer months, and tampering was limited to the countertop devices. How likely is all this to be coincidental? Not very.

According to a Barnes & Noble statement, PIN-pad tampering was found in September at 63 of the chain’s 689 regular stores, but not in any of the college bookstores that make up half the chain. Since then, B&N has removed all PIN pads from stores, requiring customers to hand over a payment card that the cashier then swipes. The chain’s E-Commerce site and mobile apps were not affected.

“The criminals planted bugs in the tampered PIN pad devices, allowing for the capture of credit-card and PIN numbers,” the chain’s statement said. “Barnes & Noble disconnected all PIN pads from its stores nationwide by close of business September 14, and customers can securely shop with credit cards through the company’s cash registers.”

The chain didn’t say, but a helpful B&N associate told us, that debit-card customers’ cards would be run through the system as credit cards. That means a higher interchange rate. But this is presumably a temporary situation, and all-new PIN pads will be installed shortly.

The 63 affected stores were clustered along the New York City-to-Boston corridor, as well as near Miami, Chicago, San Francisco, Los Angeles and Pittsburgh.

The chain is being very tight-lipped about other details of the breach, citing the ongoing FBI investigation. It even got a letter from the U.S. Attorney’s office in New York, giving the chain what it hopes will be a get-out-of-jail-free card when states with breach-notification laws, such as California, come asking why affected customers weren’t notified.

Because of the details blackout, we don’t know how up-to-date the PIN pads were, exactly how they were compromised, how the breach was detected or when the breach is believed to have begun. But we do know that the tampering was physical, only involved PIN pads and didn’t affect the stores’ POS software. This wasn’t a network attack or a virus, and the fact that the stores were so widespread means it is unlikely that associates were involved.

It really does sound like this summer’s sequel to Michaels, Aldi and Hancock.


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