Security Breach Exposes 40M Credit Cards

The Good Reverend writes "MasterCard International announced today that a security breach at CardSystems Solutions, a third party processor of payment card data, potentially exposed more than 40 million cards. Mastercard is aware of the specific card numbers affected, and is giving its member financial institutions the numbers that may have been compromised. Unlike many of the past high profile cases this one involves a hacker rather than lost packages. CNN Money, the New York Times, Reuters, MSNBC, ZDNet, C|Net, and the Washington Post are also covering the story."

Comments

What I would like to see

[Timesprout]

since people here (Ireland) and the UK are basically being encouraged to rack up debt is some one to crack Mastercard/Visa and wipe out all the amounts owed on credit cards. Might encourage the financial institution to be a little less carefree with their lending policies.

Re:What I would like to see

[timeOday]

On the other hand, we could always ask the "responsible" adults who take out these credit cards to actually take responsibility for once and only take out and use credit they can afford to pay back?

It's counterintuitive, but I don't think this is what the creditors want, really.

Yes, they would like everybody to be in debt up to their eyeballs and still get 100% repayment, but the simple fact is some percentage of people who borrow to the max will have a period of unemployment, or divorce, or health problems, or simply get discouraged and choose to flake out.

Getting closer to 100% repayment would require significantly lower levels of personal debt and higher savings. It works out better for creditors, and perhaps even for the GDP of nations, to keep individuals highly motivated - on the edge of financial disaster. The ocassional losses are more than compensated by high balances at high interest.

Creditors like to take on this victim complex whenever somebody fails to repay. But in fact, all investments have risk, including loaning money to people through credit cards. That level of risk is already reflected in the high interest rates that borrowers pay on the cards. Why do companies offer these risky "payday loans"? Because the usurious interest rates and penalty fees more than make up for the losses.

Creditors also like to blame deadbeats for placing an extra burden on the rest of us good, hardworking and honest citizens. But this too is mostly false, since people are placed in different pools depending on their payment history. Those with significant credit history blemishes are already paying sky-high interest rates - a sort of security against the credit, which they will never get back even if they are perfect borrowers for the rest of their lives.

And in case you're wondering, no, I don't have bad credit. But I do have only so much pity for the credit card companies, with their crocodile tears, as they demand bankruptcy reform (favorable to themselves, of course) while socking away truckloads of profit. If our law were really putting creditors in an unfair disadvantage, credit would be hard to get, and that would be a problem. Instead, payday loan outfits are sprouting on every corner like mushrooms, and college students with no income can get as many credit cards as they like. That doesn't sound like an under-profitable industry to me.

being a site full of geeks

[circletimessquare]

everyone here will be proposing a technical solution

but let me posit my own nontechnical solution: the processor must pay for a replacement card for every single victim

This is simply the price of outsourcing.

[0xdeaddead]

See in the banking industry we run these "penetration scans" all the time, that are TOTALY WORTHLESS. I cannot emphasize this enough, that running the weakest setup possbile will pass their "tests" with flying colours. The people doing these tests (Some certified security specialists!) Think that firewalls are magical devices that know how to stop the pesky hackers. Bottom line is that people are involved, they are out of their element, and simply placeholders. Management in general needs to get out of this "placerholder" mentality when it comes to jobs, and just fire people that are not doing their jobs.

Ok enough ranting, but trust me, in the late 90s banks were trying to outsource as many things as possible from customer service, to invoicing, bills, credit collections, applications and so on. As you can see when the "Credit card company" becomes nothing more than a brand, and a board of execs, everything is out of their control, not to mention every peice of the old credit empire is open for attack.....

If anything the question is why did it take so long to find them?!

Weakest link

[hellfire]

It's not surprising someone other than MasterCard actually had a list of card numbers stolen. I have customers all the time tell me how they don't like what they feel are draconian measures to protect the credit card numbers people have in their own systems. What they fail to understand is that Visa and Mastercard require us to do this, and the protections we have are customer service.

But they still complain, because their customers and they themselves don't ever notice. Hell at one point I was told by a demanding customer to remove the protections because he said "I'll risk it." I was tempted to show him how insecure he was by remotely accessing his system, getting his list of customer phone numbers, and telling all his customers that he was careless with credit card numbers and their numbers could have easily been stolen from his system.

People are pretty careless about credit card security. It's usually in the name of convenience and visible customer service. Credit card security is invisible service. Being able to purchase something conveniently flies right in the face of having security which just might prevent you from selling something to someone, so some people don't care, as long as they are selling. Owners care once they find out that they'll be issued chargebacks, but individual salesreps will write down every credit card number on a piece of paper if it means making money for them personally.

Visa and Mastercard have the right idea, and in the press release I like how they said that they gave cardsystems a "limited amount of time" to basically get their act together so this doesn't happen again. Education and enforcement of regulations... nice to see an organization, especially one that is a corporation, actually give a damn.