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FUTURE SHOP LATEST VICTIM OF NET HACKERS

E-mail hoax panics company's credit card users

Source: Toronto Star

Posted on June 8, 2000

      An e-mail hoax warning that Future Shop Ltd.'s entire credit card database had been broken open created panic yesterday among customers and widespread confusion in Canada's banking industry.

      About 10,000 subscribers to the retailer's electronic newsletter received a message yesterday morning purportedly from president Kevin Layden claiming that the company's credit card database was compromised.

      "If you have used a credit card on our website (sic) or in one of our stores in the past three years you should contact the card issuer as soon as you can and tell them to issue new account numbers and cancel the old ones," read the e-mail.

      After reading the the message, Toronto resident Bill Mazanik promptly called his bank to cancel his Visa card. "The Canadian Imperial Bank of Comerce (CIBC) was taking this thing for real," said Mazanik, a retired information technology consultant. "They just went through the process and cancelled my numbers."

      When contacted by The Star yesterday morning, a swamped CIBC service representative confirmed that every second call she was taking was about the Future Shop warning.

      "At this point we are cancelling and reissuing a new number and expiry date."

      But by noon, the message was filtering out that the e-mail warning was a hoax.

      "The e-mail was not known to be a hoax for a couple of hours," explained Christine Croucher, executive vice-president at CIBC Visa.

      The real Kevin Layden said, from his Burnaby, B.C.-based headquarters, that he's brought in the RCMP and formed an internal team to investigate the matter.

      "Absolutely none of our credit card databases have been accessed in any way, shape or form," he said.

      The Future Shop, which reached $1.68 billion in sales last year, uses third-party service providers to send out a biweekly e-mail bulletin to about 73,000 customers.

      Layden said someone hacked into one of those companies late Tuesday and gained access to about 10,000 e-mail addresses.

      Future Shop is also getting unsolicited help from some tech-savvy customers who are trying themselves to track down the perpetrator, said chief financial officer Gary Patterson.

      "This type of stuff really gets people's backs up."

      The RCMP has investigated about 150 hacker cases a year, and often it's the bragging by the hackers, and not computer wizardry, that lets police catch the crooks, said Paul Teeple, who is with the RCMP's technical operations branch in Ottawa.

      "The hacker is going to tell someone and it eventually gets to someone who doesn't like it."

      The incident could hurt Future Shop's efforts to expand its online sales to $20 million this year from $1.5 million last year.

      It could also impact other e-tailers as well, scaring off online shoppers, predicted Michael Szego, an e-commerce consultant with Toronto's J.C. Williams Group Ltd.

      "This will affect the broader Canadian consumer communities who will read this in the paper," he said.




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