Posted on 06/17/2005 4:13:09 PM PDT by HAL9000
NEW YORK - A security breach of customer information at a credit card-processing company could expose to fraud up to 40 million cardholders of multiple brands, MasterCard International Inc. said Friday.The credit card giant said its security division detected multiple instances of fraud that tracked back to CardSystems Solutions Inc. of Tucson, Ariz., which processes transactions for banks and merchants.
MasterCard said in a news release late Friday afternoon that it was notifying its card-issuing banks of the problem.
CardSystems was hit by a computer virus that captured customer data for the purpose of fraud, said company spokeswoman Sharon Gamsin. The FBI was investigating.
MasterCard, which said about 14 million of its own cards were exposed, said it was giving CardSystems a "limited amount of time to demonstrate compliance with security requirements."
John Perry, chief executive officer of Cardsystems, did not immediately return calls. Nor did officials from American Express and Visa; Discover had no immediate comment. MBNA, a large issuer of cards, also did not immediately return a call.
The breach is the latest in a series that has hurt a number of high-profile companies - including Citigroup Inc., Bank of America Corp. and DSW Shoe Warehouse.
It also appears the largest involving financial data, said David Sobel, general counsel at the Electronic Privacy Information Center.
"The steady stream of these disclosures shows the pressing need for regulation of the industry both in terms of limitation in the amount of personal information that companies collect and also liability when these kinds of disclosures occur," Sobel said.
That the breach involved a third party also "indicates that this is a shadowy industry where the consumer never really knows who is going to be handling and using their personal information," he added." Presumably, the affected consumer thought they were dealing with MasterCard."
Earlier this month, Citigroup said United Parcel Service lost computer tapes with sensitive information from 3.9 million customers of CitiFinancial, a unit that provides personal and home loans.
There have also been breaches involving other kinds of sensitive data.
ChoicePoint Inc. said in February that thieves using stolen identities had created 50 dummy businesses that pulled data including names, addresses and Social Security numbers on as many as 145,000 people.
In March, LexisNexis Inc. disclosed that hackers had commandeered a database and gained access to the personal files of as many as 32,000 people.
The company has since increased its estimate of the people affected to 310,000. Information accessed included names, addresses and Social Security and driver's license numbers, but not credit history, medical records or financial information, corporate parent Reed Elsevier Group PLC said in a statement.
"Hardly a week goes by without startling new examples of breaches of sensitive personal data, reminding us how important it is to pass a comprehensive identity theft prevention bill in Congress quickly," said Sen. Charles Schumer, D-N.Y.
Nor did Bill Gates.
FYI
This seems to be happening more and more. No one is safe.
everyday i just feel more and more safe. /sarcasm
From Reuters
MasterCard security breach could hit 40 mln cards
Fri Jun 17, 2005 6:34 PM ET
By Spencer Swartz
SAN FRANCISCO (Reuters) - MasterCard International on Friday said a security breach of credit card payment data had exposed about 40 million cards of all brands to potential fraud in what one analyst said was the biggest privacy breach ever.
About 13.9 million of those credit cards at risk are MasterCard-branded cards, the company said. An unauthorized person infiltrated cardholder data at a company which processes transactions.
"It sounds like the Guinness Book of World Records here," said Richard Smith, a leading computer privacy activist who runs a Web site called ComputerBytesMan.com.
There have been a string of episodes this year in which companies have reported stolen or misappropriated customer data. Bank of America Corp., ChoicePoint Inc., and Reed Elsevier's are some of the companies that have reported breaches.
MasterCard International said its security staff identified the breach at Tucson-based CardSystems Solutions Inc., a third-party processor of payment card data. Third party processors process transactions on behalf of financial institutions and merchants.
Secret Service spokesman Jonathan Cherry declined to comment. The U.S. Secret Service and CardSystems were not available for comment. Calls to Visa USA, MasterCard's biggest rival, also were not returned immediately.
MasterCard said security vulnerabilities in CardSystems processor's systems allowed an unauthorized individual to infiltrate CardSystems' network and access cardholder data.
MasterCard cautioned that social security numbers, dates of birth and the like were not stored on MasterCard cards.
CardSystems has already taken steps to improve the security of its system, MasterCard said it was giving the company "a limited amount of time" to demonstrate compliance with MasterCard security requirements.
MasterCard said it immediately notified its customer banks of specific card accounts that may have been subject to compromise so they can take the measures to protect their cardholders.
(Additional reporting by Duncan Martell and Eric Auchard in San Francisco and Andy Sullivan in Washington)
Not Gates' fault. Fault is with those who wrote the virus for illegal purposes in the first place.
ALL the credit card companies used by my wife, me and our three children. All of them.
If you are going to be a thread nanny, learn to post a hot link.
Never mind, there were two that popped up and one was TBO and the other AP. It looks like the TBO one was pulled. But thanks for the hotlink tip.
Text of MasterCard Statement
June 17, 2005 4:44 p.m.
Full text of MasterCard's press release announcing a security breach exposing more than 40 million cards to fraud
PURCHASE, N.Y. -- MasterCard International reported today that it is notifying its member financial institutions of a breach of payment card data, which potentially exposed more than 40 million cards of all brands to fraud, of which approximately 13.9 million are MasterCard-branded cards.
MasterCard International's team of security experts identified that the breach occurred at Tucson-based CardSystems Solutions, Inc., a third-party processor of payment card data. Third party processors process transactions on behalf of financial institutions and merchants.
Through the use of MasterCard fraud-fighting tools that proactively monitor for fraud, MasterCard was able to identify the processor that was breached. Working with all parties, including issuing banks, acquiring banks, the processor and law enforcement, MasterCard immediately launched an investigation into the breach, and worked with CardSystems to remediate the security vulnerabilities in the processor's systems. These vulnerabilities allowed an unauthorized individual to infiltrate their network and access the cardholder data.
CardSystems has already taken steps to improve the security of its system. However, MasterCard is giving it a limited amount of time to demonstrate compliance with MasterCard security requirements.
Importantly, in keeping with its standards that focus on consumer protection and the safeguarding of sensitive information, MasterCard immediately notified its customer banks of specific card accounts that may have been subject to compromise so they can take the appropriate measures to protect their cardholders.
In the event of a cardholder data breach, MasterCard always takes this precaution regardless of whether there is any indication that fraud has resulted and whether or not there has been a final determination that a security breach has or has not occurred. Upon receiving notice from MasterCard, banks are able to take the appropriate steps to protect their cardholders from potential fraud. No highly sensitive information, such as social security numbers or dates of birth or the like, are stored on MasterCard cards.
Consumers have strong protection if unauthorized charges are made on their MasterCard cards. In the U.S., MasterCard cardholders are protected by MasterCard's Zero Liability policy for unauthorized transactions on their accounts. If MasterCard cardholders have any reason to believe that their cards were used fraudulently, they should contact their issuing bank.
Protecting cardholders, preventing fraud, and safeguarding financial information is a top priority at MasterCard. The company maintains a global team of experts devoted to maintaining the integrity and security of its payment systems and who work closely with federal, state, and local law enforcement agencies to help in the apprehension of fraudsters and other criminals.
Federal Regulation of Data
While Congress continues to consider data breach notification standards, MasterCard urges them to enact wider application of Gramm-Leach-Bliley, the act that includes provisions to protect consumers' personal financial information held by financial institutions. Currently, GLBA only applies to financial institutions providing services to consumers, including MasterCard. MasterCard urges Congress to extend that application to also include any entity, such as third party processors, that stores consumer financial information, regardless of whether or not they interact directly with consumers.
Source: BusinessWire
I figured as much. That's no virus, and HAL may need to revise his keywords. Again. ;)
"Not Gates' fault. Fault is with those who wrote the virus for illegal purposes in the first place."
LOL. The illegality may lie with thost who wrote the virus. Fault lies with those who created the OS that was so full of exploits, just waiting for a virus to be written to take advantage of the weakness.
This is what happens when your firewall sucks.
"Through the use of MasterCard fraud-fighting tools that proactively monitor for fraud, MasterCard was able to identify the processor that was breached."
Proactive? They don't even know the meaning of the buzzwords they're spewing.
Could be an inside job and the virus is just a cover story.
We don't have to jump off the deep end about this but something needs to be done.
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