The recent theft of 40 million credit card numbers at CardSystem Solutions in Tuscon, AZ seems to be just another in a growing number of security breaches announced this year. However, CardSystem Solution has a scary twist. This is the first large-scale breach that involved a computer worm from a public network. All the prior breaches involved insiders or poor physical security with the information. This new type of breach can take place without the crook ever setting foot in the United States.

Advice: Thanks to FACTA, everyone in the country now has access to a free credit report every year from each of the three major reporting agencies. Mark it on your calendar to pull one every four months to be safe.

Last week we looked at behavioral targeting in marketing. The equivalent in sales is price discrimination. Stores now tailor prices to maximize their profits based on what they know about you. Online retailers might lower prices for customers they know are bargain shoppers or offer higher prices with faster shipping for impatient customers. The technology exists to do similar things in a retail store. Consider Bloomingdale’s Klondike system that gives floor reps instant access to your store history. They can offer their best customers special services or additional items. Stores might also erect hidden policies to discourage “bottom feeders.” These are customers that only shop bargains or return too many items.

Advice: It is more difficult to track you if make purchases with cash where reasonable.

Loyalty Card Follow-up: Several readers had some interesting suggestions to get the loyalty card discounts without giving away your personal information. My favorite was getting multiple cards for all your pets. It has the added benefit of making it easy to identify junk mail.

Today’s retailers collect information on what every shopper is looking at, what they are buying and how often. They take this information to a data-mining firm to help them create different profiles for their customers and develop the best ways to market to them. Think this is just happening on the Internet? Think again, grocery chains have been collecting information with their frequent shopper cards for years. With 50% of shoppers using the cards; they now have a treasure trove of information about you. Your value to the store has been measured and you are increasingly being treated accordingly.

Advice: Is the discount from the frequent shopper card worth the personal information you are giving them?

Today marks another step forward in the fight against identity theft. Starting today the Disposal Rule of the Fair and Accurate Credit Reporting Act (FACTA) goes into effect. Businesses must now shred the personal information they collect on their employees and customers.

Advice: If you employ anyone at your home, including nannies or maids, make sure you shred all of their personal information because the law applies to you. Not to mention extending the same care with their information as you expect from your employer.