Security Breach Could Expose 40M to Fraud -No these aren't the files Hillary stole

AP ^ | 6/17/05 | JOE BEL BRUNO

[Tumbleweed_Connection]

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. (C), Bank of America Corp. (BAC) 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. (CPS) 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.

[Fiddlstix]

BTTT

[GOP_1900AD]

I am increasingly tempted to all but stop using my credit cards. I really only use them as if they were debit cards paying off the entire balance monthly. I'm doing it for cash back and to avoid carrying large amounts of cash around. But this stuff is getting worse. Cash is looking better and better these days.

[Tumbleweed_Connection]

NY owes us ~$40 million from 9/11, how will / when will that be repaid?

[Happy2BMe]

We move one step closer to that "National ID System" and three steps backward with social security numbers being sold for cheap on the street corners of Miami and L.A. to illegal aliens seeking identities in America . .

================================

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."

[Happy2BMe]

Identity theft is Big Business.

Some Immigrants Are Offering Social Security Numbers for Rent (Illegal Immigration)

[devolve]

I recall a (very) recent FR thread - illegal aliens caught in drug business

Charges included 5 years and a $250,000 fine per offense per criminal for use of fraudulent federal documents

Wouldn*t that also apply to SS cards illegally obtained and used by illegal aliens across the board?

[snowsislander]

We move one step closer to that "National ID System" and three steps backward with social security numbers being sold for cheap on the street corners of Miami and L.A. to illegal aliens seeking identities in America . .

While these credit card numbers could be used as part of id theft, they are far more likely to be used for normal fraudulent "no [credit] card presented" transactions which a national id system would do nothing for.

I think Card Systems Inc is only handling transaction information (their web page suggests that they are just a payments processor), which would consist of the card number, the amount of the payment, an identifier for the transaction/authorization, and maybe a few other items.

To carry real identity theft, more information would be necessary, such as Social Security numbers and current residence addresses. (They may have the latter, but I don't think they would need the former -- though who knows what they are being provided, even unnecessarily, by the credit card companies or other entities?)

[jdm]

Note to self: Dump all Card Systems Inc. stock when market opens Monday (sarcasm)