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Hacks on Californians shot up last year, more are expected this year

California Atty. Gen. Kamala Harris said retailers and legislators must do more to stop data breaches.
(Jae C. Hong / Associated Press)
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Hackers breached data systems covering 18.5 million Californians last year -- seven times the number in the previous year -- and there’s a chance they’ll rip off more residents this year, said California Atty. Gen. Kamala Harris.

Harris, in a report released Tuesday, said small and large businesses must do more to protect customers’ accounts and the information on consumers’ credit and debt cards. She also said that the state Legislature, as well as consumers themselves, must take steps to curtail an explosion in data thefts.

“Data breaches … threaten the privacy, the security and the economic well-being of consumers and businesses,” Harris said at a news conference in Los Angeles.

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The sharp rise in the number of California residents exposed to breaches came largely from massive hacks at retailer Target Corp. and daily deals website LivingSocial, each of which affected roughly 7.5 million Californians.

Even without those two attacks, the report said, hackers still got to 35% more residents than they did in 2012.

The total number of breaches reported to the attorney general’s office also rose, climbing 28% to 167. Harris said the state is on pace to exceed that number this year, raising the likelihood that with this year’s massive hack into Home Depot Inc., the number of consumers at risk will rise again.

The attorney general recommended several steps to limit the frequency of breaches and mitigate the effects of those that occur.

She said businesses should adopt stronger encryption technologies that safeguard sensitive consumer data. And retailers must make their breach notifications to consumers more visible and should upgrade their systems to handle payment cards equipped with micro-chips, Harris said.

Those chips, which the United States has been slow to adopt, make it difficult for thieves to create phony cards that are sold on the black market.

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The attorney general also urged legislators to provide grants to small and medium-sized businesses so they can better safeguard customer data.

Californians should carefully monitor their accounts for suspicious activity following a breach and promptly change any passwords and user names involved, the attorney general said.

Consumers also should continue checking their accounts long after a business announces that it’s been hacked, said Norma Garcia, manager of the financial services program at Consumers Union, the lobbying arm of Consumer Reports magazine.

“The fraudsters aren’t going to hit necessarily right after the breach,” she said. “They are going to wait. When you are no longer looking, that is when they are going to hit.”

Follow me on Twitter: @khouriandrew

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