Lost Credit Data Improperly Kept, Company Admits

Zak3056 writes "Last week, Mastercard announced that up to 40,000,000 credit card numbers may have been compromised by one of their processing companies. Today, the New York Times (registration, along with first born child, required) is reporting that the company in question, CardSystems Solutions, should not have been retaining that data to begin with. John M. Perry, CEO of the processor in question, claims the data was merely being kept for 'research purposes.' The number of compromised Master Card accounts has been revised downward to about 68,000, with another 132,000 possibly compromised accounts belonging to Visa, American Express, and other companies."

Comments

Slight difference?

[jez9999]

Am I reading this correctly? 40 million down to just over 60 thousand? I mean, if the latter figure is correct, this is a MUCH different (less major) story.

Re:Slight difference?

[vandon]

...corporate America isn't giving a damn about security for the average joe's accounts and such.

But they'll charge you sky-high intrest rates when your credit is messed up because someone used your information to open 30 accounts across the nation. I really hate to say it, but we need a personal/banking information 'PATRIOT' act to force all these companies to take security seriously.

Re:Slight difference?

[alan_dershowitz]

Well, that's kind of true and kind of not. The credit card companies are a few days from requiring vendor compliance with a strict standard for credit card information processing and storage. Basically, if you are not implementing this security standard, you will not be able to use credit cards in your place of business. (this is for online businesses and Point of Sale service providors, not like restaurants and stuff.)

CISP and PCI compliance

If data in a vendor's system is compromised, Visa and Mastercard will charge fines upward of a hundred thousand dollars per violation, and by the time a third violation occurs, your place of business may be denied use of credit card services permanently.

That's a good thing for everyone, but when crap like this happens it pisses me off. Credit Card companies are (correctly) requiring the strictest standards for storing cardholder data by vendors, but at the same time they themselves are losing 40 million cardnumbers, losing unencrypted backup tapes in shipping, etc. What pisses me off is that if I screw up and lose a credit card number into the wild, I get fined 100K. If they lose 40 million cards, what are they gonna do, fine themselves?

Lawsuit

[fdiskne1]

Can you say "lawsuit"? This was a total lapse in judgement in keeping data they shouldn't have compounded with the fact that they didn't secure their network. I'd place money on this company not surviving this error. Even if the loss of money in settlements doesn't break them, I'd bet they will lose most of their future business because of this (and rightly so).

Not Surprising

[ravenspear]

It makes sense that the companies that are retaining CC data improperly would be the ones most likely to allow it to be compromised.

The security of the data is nothing more than a second thought to many of these companies. If they feel they can keep around a huge data mine of everyone's data they can get their hands on, in violation of the proper procedures, it should come as no surprise that they wouldn't be that vigilant in securing it properly.

Support legislation making this a crime.

[Bamfarooni]

Once again, evidence that there should be criminal penalties for improper handling of personal information. If you collect it, you better make sure it's safe. Otherwise, stop collecting it.

Time to teach some math skills...

[multi-flavor-geek]

For those people who pay attention to the news, 40,000,000 cards compromised, that would be basically every card they handle assumed to have ben compromised, an imprtessive feat indeed. The person would have had to have a consistent and unnoticedconne3ction to the server, or walked out with a burned dvd or two of information.
The other interesting mathimatical issue that came up was the child molester in Oregon, he was reported to have molested 30,000 kids over 35 years, 12 of which he spent in jail, hmmmm
that would be over 4 seperate kids a day.
I can't even find a way to molest 4 seperate drunk girls in a night with out at least one of them telling someone. I am calling bullshit on this one.

Not just one

[Roadkills-R-Us]

According to the article, the company in question has *never* been in compliance with MC's security rules. Since MC is supposedly doing audits and all, why have they not terminated the account and awarded it to someone else? They're leaving themselves wide open, and they're a much bigger target than the company that got caught.

An interesting data analysis problem

[G4from128k]

The article alludes to fraudulent activity starting back in mid-April leading to an investigation of this particular card processor in mid-May. That suggests that the card companies do some rather interesting statistical analyses on fraud patterns to find commonalities. In this case, they were able to detect that an unusual number of cards with fraudulent transactions had, at some point, a transaction that shared a common card processor sometime in the past.

Obviously, someone (I assume its Mastercard, Visa, etc.) is storing sufficient volume of historical transactions (including metadata such as the 3rd-party transaction processor) to analyze patterns such as this. With some 60 billion card transactions per year worldwide, this would make for a very large dataset and a very interesting analysis problem.

Moral Hazzard?

[DaveInAustin]

This story on npr says that the credit card companies can actually wind up making money when a fraudulent charge is made. Does this create an incentive for them to keep things safe?

When will these companies be held responsible?

[Todd Knarr]

That's what I want to know: when will companies that mishandle data like this be held 100% responsible to the people whose data they mishandled for the losses, fraud, etc.? I'm of the opinion that only when mishandling data results in actual financial consequences to the mishandler will things change.

Looks like I was hit

[Urgo]

I got two emails from my bank today (10:52am and 4:59pm EST).

Dear Customer,

An incident involving unauthorized access into a third party processor system has occurred. A company which processes transactions for physical retail merchants and Internet merchants was the victim of a computer hacker between September 2004 and May 2005. They have identified your check and/or credit card as one of the cards possibly exposed. Information compromised includes account numbers and expiration dates, as well as cardholder names and addresses.

We understand that you will most likely be concerned when you read this. Rest assured that if you information has fallen into the wrong hands, you will not be liable for any unauthorized transactions using your Check Card or VISA Card*. However, it is very important that you monitor your account(s) closely and notify us immediately of any unauthorized transaction. If such a transaction does occur, you will need to complete a VISA dispute form, available through the maintenance area of our online banking system, in order to receive provisional credit for the amount of the transaction. We recommend, as a precaution, that you call Customer Support to block your card and we will re-issue a new one. Our Banking Specialists and Loan Representatives will make that decision with you on a case-by-case basis, as we do not want to hamper your use of the card.

We also understand that you will have other questions, such as the identity of the processor. When we receive notifications of this variety from VISA, VISA does not and will not reveal the name of the merchant or processor unless the incident has already been made public by the merchant.

Again, we do ask that you monitor your account carefully in the weeks ahead by making use of our telephone, wireless, and online banking systems. If you have any questions or concerns, please contact a Banking Specialist or Loan Representative for more information.

Thank you for banking with us.

*This limit on liability does not apply to PIN-based ATM or point-of-sale transactions.