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Customer Credit Card Data Stolen At Michael's Arts And Crafts

SAN FRANCISCO (KCBS) – Michael's Arts and Crafts has announced it would replace the debit card processing machines in all its stores nationwide because of a security breech that allowed thieves access to customer's bank accounts.

From February to May, false card readers in at least 80 Michael's stores from Massachusetts to Washington transmitted bank account numbers and pins to thieves who would then withdraw cash from those accounts at California automatic teller machines.

KCBS' Holly Quan Reports:

"This is a particularly audacious move by what had to be an organized crime ring," said Julie McNelley a senior analyst who covers fraud and data security for the research firm Aite Group.

She said the crooks had to either distract a store clerk, or pose as a repair clerk, to be able to swap out the regular card reader with a rigged one much more sophisticated than the PIN skimmers occasionally found on gas pumps.

"You can't see anything. They are completely transparent to the eye. It's embedded within the terminal itself," McNelley said.

The popular store for beads, yarn and fabric has 7,200 locations across the country, including several in the Bay Area.

Although most of the affected customers lived in the Chicago area, McNelley and other analysts advise that customers check their bank statements for unauthorized withdrawals.

"They know that they have a limited window of time to use the compromised account numbers and pins," she said.

McNelley said the concerted effort to access the stolen accounts quickly was another sign of the coordination and planning that went into the scheme.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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