Arrested Pair Thought to be Target Hackers, NRF Urges Adoption of Chip and PIN Cards

A couple from Mexico was arrested late Sunday after being caught with more than 100 fraudulent credit cards, and while it was initially reported that the cards were encrypted with account information from Target's (NYSE: TGT) breach, a federal official close to the matter says the arrest has no connection to the Target hack.

Police Chief Victor Rodriguez in the South Texas city of McAllen said the pair bought tens of thousands of dollars' worth of merchandise this month. Rodiguez said he had "suspected" a connection between the cases.

"It quickly became obvious to us…it was part of a data set that was involved in what we call now the Target data breach," Rodriguez said during a press conference on Monday.

The link between the arrests and Target's hack has yet to be confirmed. The federal official who denies the connection spoke on condition of anonymity and is prohibited from providing details about the investigation, reports CBS News.

The two suspects, Daniel Dominguez Guardiola and Mary Carmen Vaquera Garcia, are both from Monterrey, Mexico and had warrants out for their arrests alleging credit- and debit-card fraud. The couple is believed to have purchased the credit card information from overseas hackers, and then used those numbers to create a series of payment cards. Detectives became suspicious of the couple after they went on a shopping spree, charging tens of thousands of dollars worth of high-end electronics equipment, according to reports.

The Secret Service was alerted about the spending, and police are said to have connected the account numbers to those stolen during the Target breach. The department of U.S. Immigration and Customs Enforcement confirmed the identities of Guardiola and Garcia using immigration records of when they had entered Texas in the same vehicle they were driving when they were arrested.

The Target breach has put retailers on edge about securing customers' data. The National Retail Federation issued a statement urging merchants to explore chip-and-PIN technology in credit and debit cards. These cards are equipped with both an embedded chip and a traditional magnetic stripe. Cardholders must enter their PIN or sign for each transaction to be approved. If the card is stolen, the embedded microchip makes the card extremely difficult to counterfeit or copy

"PIN-and-chip cards are widely used across the globe, and it's time for the bankcard industry in the United States to adopt that technology to better protect our consumers," NRF's Senior VP for Government Relations David French said in a statement. "We must transition away from 1960s technology and adopt a 21st century system that will help reduce and prevent fraud and protect customers from the threat posed by sophisticated cybercriminals, hackers and data thieves."

For more see:
-this FierceRetailIT article
-this CBS News article

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