Today's Wall Street Journal has a long article about the credit card data theft at TJMaxx. (An online version is only available to WSJ subscribers.)
But, here's the recipe, according to the Wall Street Journal, used by the hackers, who are apparently "made up of Romanian hackers and member sof a Russian organized crime group that also are suspected in at least two other U.S. cases over the past two years".
First, create a 'cantenna' out of a Pringles can to intercept wireless data at longer distances. The cantenna is quite easy (and cheap; total cost under US$15) to make; you can find complete instructions via your favorite search engine.
Next, position yourself outside a store that has a wi-fi connection for their in-house computer system. TJMaxx used wi-fi for their portable price scanners, and for cash-register-to-back-office-systems.
Find a store that uses no encryption of WEP encryption (easy to unencrypt). Use open-source software to decrypt the WEP password. Then monitor wi-fi traffic using a network sniffer to find the passwords used by employees as they log into the stores network.
Now use that login information to create your own accounts on the store's system (or just use those logins). Start wandering around the store's computer until you find the unencrypted credit card transaction database. You can also put in your own software to intercept credit card transactions to the parent company.
Store all of your information using open source PGP encryption. Then put in a backdoor to allow you to connect to the store's system from anywhere on the Internet.
Wait a bit, being careful to keep a low profile. When you get a pile of credit card numbers, sell those in some private areas to others. I think the going rate is about US$10-25 per credit card.
But keep a low profile, so you can keep grabbing credit card info over several years. At TJMaxx, the hackers started in July 2005, and were able to continue through December 2007, eventually getting at least 47.5 million credit card numbers (or as many as 200 million).
So, what do you do? The best thing is to keep an eye on your financial accounts. Look at your credit card charges often -- perhaps daily or weekly. Look for small purchases that you don't remember making. If you find one, immediately contact your credit card company, dispute the charge, and ask for a replacement credit card (cancelling the old credit card number).
And get your credit report. Use this free site (not the ones that are advertised on TV):
https://www.annualcreditreport.com/cra/index.jsp . You can request a free credit report from each credit reporting agency each year. (Do one every four months.) Check things carefully.
A good place for information is at the California Dept of Consumer Affairs site here:
http://www.privacyprotection.ca.gov/cover/identitytheft.htm . Good information about preventing identity and financial theft, and what to do if you are a victim.
For businesses, make sure that you follow the "Cardholder Information Security Program" (CISP) guidelines to protect your customer's credit card numbers. Start here for info:
http://usa.visa.com/merchants/risk_management/cisp.html .You don't want the expense or the exposure of credit card theft.
Just ask TJMaxx. The reports are that it will cost them over US$1 Billion over five years.