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Potential Breach of Payment Data at Noodles & Company

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Fast casual restaurant chain operator Noodles & Company (NDLS - Free Report) has warned customers of a potential breach of its payment data systems.

As per the company, the recent data security incident is likely to impact customers who had used payment cards at certain Noodles & Company locations between Jan 31, 2016 to Jun 2, 2016.

However, the company has assured that credit and debit cards used at the affected units are no longer in danger from the malware involved in this incident. The company also added that online transactions at were safe.

What’s the Fuss About?

Noodles & Company began its investigation on May 17, after its credit card processor reported bizarre activity. The restaurant operator straight away started working with third-party forensic experts and on Jun 2 detected a malware and suspicious activity on its computer systems that signaled a possible infringement of the customers debit and credit card data.

Notably, the information regarding the cardholder’s name, card number, expiration date, and CVV had come under risk as a result of this event.  

Steps Undertaken

Noodles and Company continues to work with third-party forensic investigators to find out how this breach occurred and what details were affected. The company is also working with the United States Secret Service to scrutinize this security breach.

Moreover, Noodles and Company is looking to employ added measures to further safeguard customers’ payment card information. These measures include eradicating the malware in issue to restrain this incident and to avoid any further unlawful access to customers' debit and credit card details.

The company has also set up a dedicated assistance line from 9 a.m. to 9 p.m. EDT at 888-849-1067.

Further, Noodles & Company has appealed to all the customers to stay alert against identity theft by assessing their financial account statements frequently and examining their credit reports for any suspicious activity. The company has advised guests to instantly report any illegal charges to their card issuer.

Our Take  

Of late, several businesses in the U.S. have been infected with malware that is programmed to drain off payment card details from cash registers in stores.

Earlier this month, U.S. burger chain operator The Wendy's Company (WEN - Free Report) announced that it has detected harmful cyber activity in some franchise-operated restaurants.

Moreover, there have been instances of cyber attacks on several retailers including The Home Depot, Inc. (HD - Free Report) and Target Corp. (TGT - Free Report) as well.

With cyber security becoming a matter of extreme importance, all the companies should therefore regard it as a part of their safeguarding strategies.

We believe that if the data breach is proved to be true, it might cost Noodles & Company in terms of lowered profits and revenue as customers will lose confidence in eating out at the fast casual restaurateur.

Noodles & Company currently has a Zacks Rank #3 (Hold).

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