HONOLULU (HawaiiNewsNow) - Hawaii banks are replacing tens of thousands of bank cards because of a credit breach at Target stores late last year.
Personal financial information from 121,000 cards across Hawaii was stolen from people who used the cards at Target stores between Nov. 27 and Dec. 15 of last year. The breach affected 40 million people nationwide.
"The number of accounts breached is a serious concern. And the banks want to do everything they can to protect the consumer from the potential abuse of their accounts," said Edward Pei, executive director of the Hawaii Bankers Association, which represents 11 Federal Deposit Insurance Corporation-insured financial institutions in Hawaii.
Bank of Hawaii has replaced approximately 13,000 customers' bank cards and brought in extra staff starting Friday to remind customers who have not yet activated their new cards to do so, according to a BOH spokesman.
First Hawaiian Bank is replacing about 10,000 customers' debit and credit cards. Some FHB card holders have already received them but others will get new ones next month, an FHB spokesman said.
Central Pacific Bank re-issued roughly 2,000 customers bank cards the first week of this month.
A Central Pacific Bank spokeswoman said just one of its credit or debit card customers was affected by this credit breach and the amount of money used without authorization was just $200. First Hawaiian Bank and Bank of Hawaii did not provide figures about how many of their card holders actually suffered fraudulent charges because of the Target case.
Each replacement card costs the banks about $10. That means Bank of Hawaii spent approximately $130,000 on the new cards so far. The re-issuing cost First Hawaiian around $100,000 and Central Pacific Bank roughly $20,000.
"It's more than just the cost of the card itself, it's the cost to produce the card, to mail the card, and then the follow-up to ensure that the card holder has received a new card and disables the old card," Pei said.
The banks are not issuing replacement cards to all their customers, just to those who shopped at Target during the time period the fraudulent access happened.
Iris Ikeda Catalani, the state's commissioner of financial institutions, said consumers should not use debit cards in higher-fraud risk transactions such as buying gas. That's because gas stations often have unattended card scanners that could fall prey to skimmers, who insert strips in the scanners to steal customers' credit information.
"The chance of having some immediate harm is greater on your debit card, than, say on your credit card," Catalani said. "It's tied directly to your checking account so once you swipe it, the money is gone."
"On the credit card side," Catalani added, "because you're not going to pay for those particular items, you're not really going to see a loss. So you're going to identify that you didn't buy those computers, I'm not going to pay for that."
Catalani said it's safer to use credit cards instead of debit cards for purchases at gas stations, hotels, car rental agencies and restaurants. Online purchases, big ticket items such as furniture or electronics and travel such as airline, ship and train tickets are also safer to purchase using credit cards, Catalani said.
While customers can apply for reimbursement from their banks for fraudulent bank card charges, they have to wait up to ten days to get their cash back. And that means thousands of dollars could be drained from a bank account before it's restored, Catalani said.
Since credit card companies essentially loan customers money, a fraudulent credit charge doesn't actually take any of the customers' money and can be stopped by calling the credit card company.