Wednesday, June 22, 2005

Banks Scramble To Contain Damage From CardSystems Hacking Incident

Steven Martin writes in InformationWeek:

Banks that issue credit and debit cards are moving rapidly to contain the damage caused by the potentially massive theft of card information from a transaction-processing company that was disclosed last week.

Some 22 million Visa-branded cards and 14 million MasterCard-branded cards were exposed to the security breach at CardSystems Solutions Inc. that was disclosed by MasterCard last week. The breach was reported by CardSystems to Visa and MasterCard in late May.

Washington Mutual has canceled 1,400 cards whose numbers were stolen and is issuing replacements. J.P. Morgan Chase & Co., which with 94 million cards outstanding is the nation's largest card issuer, hasn't canceled or reissued any cards as a result of the incident but is monitoring the situation closely, a spokesman says. Visa and MasterCard are relaying information picked up by their fraud-detection systems to issuing banks, which then decide whether to cancel or reissue cards.

The 1,400 cards canceled by Washington Mutual are known to have been used to commit fraud; an unknown but presumably higher number may be at risk for fraud, a bank spokeswoman says.


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