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VISA, MasterCard Warn of 'Massive' Breach At Credit Card Processor 164

Posted by Soulskill
from the your-security:-priceless dept.
concealment writes with news that VISA and MasterCard have been warning banks of an incident at a U.S. card processor that may have compromised as many as 10 million credit card numbers. From the article: "Neither VISA nor MasterCard have said which U.S.-based processor was the source of the breach. But affected banks are now starting to analyze transaction data on the compromised cards, in hopes of finding a common point of purchase. Sources at two different major financial institutions said the transactions that most of the cards they analyzed seem to have in common are that they were used in parking garages in and around the New York City area." According to the Wall Street Journal, the breached company is Global Payments Inc.
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VISA, MasterCard Warn of 'Massive' Breach At Credit Card Processor

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  • No Source? (Score:4, Insightful)

    by MrJones (4691) on Friday March 30, 2012 @11:11AM (#39522989) Homepage Journal

    The article has no credible source. Is this Spam?

  • Article: (Score:2, Insightful)

    by Anonymous Coward on Friday March 30, 2012 @11:13AM (#39523013)

    http://krebsonsecurity.com/2012/03/mastercard-visa-warn-of-processor-breach/

  • Re:No Source? (Score:5, Insightful)

    by ohnocitizen (1951674) on Friday March 30, 2012 @11:42AM (#39523353)
    This actually impacted me. I live in NY, and was contacted my my credit card company. They informed me I was getting a new card, that visa and mastercard said there was a breach - but were not required to report who had compromised my credit card number. "At least they tell us there is a breach". This right here is why "the market" is insufficient protection for consumer rights. We need a law requiring credit card companies to disclose businesses that compromise data.
  • Re:No Source? (Score:4, Insightful)

    by scubamage (727538) on Friday March 30, 2012 @12:01PM (#39523559)
    Most likely its a numbers thing. If visa has 300 call center reps and they have to call 20 people, it'll be done in a few minutes. However 300 reps calling 10 million will take a much, MUCH longer amount of time. Now these numbers are hyperbolic, but you get the idea. Most likely your branch office didn't have that many people affected by the valve hack (thankfully).
  • Re:No Source? (Score:5, Insightful)

    by berashith (222128) on Friday March 30, 2012 @12:09PM (#39523663)

    100% agree. I just went through this a few weeks ago. VISA told my card issuer that there had been a breach. They actually sent me a new card, but didnt tell me until fraudulent use occured. This was before my new card arrived, which actually shortened the amount of time that I had no credit card. I wanted to know who had the breach, so I could avoid ever giving them business that wasnt cash based, but they would not tell me. That part pisses me off. There needs to be an awareness as to which vendors dont find it worth their time to protect me , so I can make a decision to not use them.

  • Re:No Source? (Score:5, Insightful)

    by wickerprints (1094741) on Friday March 30, 2012 @12:15PM (#39523755)

    Because all borrowers end up indirectly paying for the cost of fraud. As is the case with many forms of financial risk, a lender typically insures against identity theft and credit card fraud. The cost of that insurance is factored into their interest rate and fee calculations and is passed on to the borrower.

    Granted, insurance doesn't completely absolve the insured of all responsibility, in as much as a driver with car insurance would not think to be totally careless about driving. Lending institutions still have an interest in preventing fraud despite being insured. The point is that when fraud increases, or if there's a catastrophic breach (as in this case, opposed to isolated small-scale instances of ID theft), the associated financial costs eventually reach the borrowers.

  • Re:No Source? (Score:2, Insightful)

    by Anonymous Coward on Friday March 30, 2012 @12:49PM (#39524221)
    Maybe not do business with them anymore? All this free market bullshit rests on the assumption that consumers are (or at the very least can be) informed about the companies they're dealing with. If you can't even know about the company you might be interacting with, then how are you supposed to "vote with your dollars"?
  • Re:No Source? (Score:4, Insightful)

    by CuriousGeorge113 (47122) on Friday March 30, 2012 @12:58PM (#39524341) Homepage

    Credible sources are still fallible.

  • Re:No Source? (Score:4, Insightful)

    by tlhIngan (30335) <slashdot@wSLACKWAREorf.net minus distro> on Friday March 30, 2012 @01:12PM (#39524561)

    This was before my new card arrived, which actually shortened the amount of time that I had no credit card. I wanted to know who had the breach, so I could avoid ever giving them business that wasnt cash based, but they would not tell me. That part pisses me off. There needs to be an awareness as to which vendors dont find it worth their time to protect me , so I can make a decision to not use them.

    And what makes you think it was the *business* that was hacked? Retailers obtain a merchant account and the merchant bank provides the processing equipment. That equipment talks to a credit card processor who handles the transactions and transfers and such.

    A credit card processor being breached means it affects MANY retailers at once. Boycotting one business over the breach may mean you're still vulnerable as your new go-to place can use the same processor.

    For many businesses, there's nothing to breach - the information is temporairly stored on that terminal you use for the duration, and the only thing the retailer has is the tiny slip of paper they get at the end. Which is probably why credit card processors get attacked, rather than individual companies.

    Even online companies do the same - that box you enter your information into may be temporarily hosted by the store, but the information is promptly forwarded to a credit card processor and forgotten by the store's server to reduce PCI requirements. Some make it obvious when they forward you to Google, Amazon or Paypal, or to a processor's site directly. Most don't, even though in the back end they're really proxying the processor's site.

  • Re:No Source? (Score:5, Insightful)

    by wickerprints (1094741) on Friday March 30, 2012 @01:57PM (#39525229)

    Your response indicates you have entirely failed to grasp the meaning of my previous post.

    Government regulation of the credit card industry prevents a lender from penalizing a fraud victim in the manner that you describe. A penalty in the form of a higher interest rate may only be applied if the borrower fails to pay an outstanding balance in a timely manner. A late fee may also be assessed. This is legal because a borrower's failure to repay the incurred debt is a reflection of their poor creditworthiness relative to other borrowers who pay their balance on time. However, a victim of fraud may not have had anything to do with the theft of the information that precipitated that fraud, which is the case with this data breach.

    In relation to my previous post, then, the cost of insuring against losses due to fraud is passed on IN AGGREGATE to the entire pool of borrowers in the form of higher interest rates and/or fees, just like the way in which they factor in other costs of doing business (such as worker salaries, marketing, customer service, and legal representation). Competition between lenders exerts pressure to keep the interest rate low, but if the overall rate of fraud increases across ALL lenders, then the overall financial risk of lending money in this manner has also increased, and therefore the interest rate must also increase to reflect this risk trend.

    To be absolutely clear, I am not talking about a scenario in which an individual borrower reports fraudulent activity on their account, and the lender then decides to punish that borrower by increasing their interest rate. What I am talking about is the big picture, in which the cost of credit card fraud and ID theft is spread out over the entire pool of borrowers because the risk of fraud is one component of the risk of lending money, and the risk of lending is part of why interest exists. Granted, this is a gross simplification of the way things actually work (as I do not discuss the role of merchants in this process, for example), but the basic point remains valid: the cost of fraud is eventually paid by the borrower. Even the merchants purchase insurance for their business, and factor these costs in the pricing of the goods and services they sell to consumers. All of it eventually falls on the shoulders of the consumer, who pays for it in the form of higher prices or higher interest.

This is a good time to punt work.

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