Major Card Vendors Stay Mum on Data Breach

[David Farber <dave () farber net>]

Begin forwarded message:

From: Gavin Treadgold <gav () rediguana co nz>
Date: June 22, 2005 8:45:40 PM EDT
To: dave () farber net
Subject: Re: [IP] Major Card Vendors Stay Mum on Data Breach


Dave, for IP if you wish.

I haven't seen much mention of the international issues associated  
with the recent data breach. Even down here in New Zealand, the banks  
have estimated that around 13,000 New Zealand Visa and Mastercards  
have been affected.

I'm sure there are some interesting issues that could arise from a  
breach that has such far-reaching impacts - for example, the storage  
of the personal details for research purposes would probably be in  
breach of New Zealand's Privacy Act for those affected.

It will be interesting, and perhaps of more than a little concern, to  
see just how far this breach spreads in the coming weeks and more  
information becomes available.

Cheers Gavin

---

Credit-card hacker hits 13,000 in NZ
<http://www.nzherald.co.nz/index.cfm?ObjectID=10332035>
22.06.05 By Juliet Rowan

The credit card details of up to 13,000 New Zealanders have been  
hacked, leaving them vulnerable to fraud, in one of the world's  
biggest data security breaches.

The breach, which happened in the United States, is thought to have  
affected 40 million credit cards worldwide. About 22 million are Visa  
cards and 14 million are MasterCard.

Visa said yesterday 12,000 cards in New Zealand had been affected and  
more than 650 of them were at high risk of fraud.

Mastercard said it had advised banks to cancel 1000 cards, among 5560  
potentially affected.

Several banks have promised to reissue cards to protect against fraud.

Major fraud is yet to be detected here but one bank says it has found  
minor fraudulent incidents that could be linked to the hacking.

MasterCard said on Friday that a hacker had infiltrated the network  
of US credit card transaction company CardSystems Solutions and  
accessed names, account numbers and expiry dates of credit cards.

The company said it notified banks after it learned about the breach  
late last month, but some banks here say they did not know until the  
weekend.

MasterCard said the breach affected cardholders who made transactions  
in the US or online with US-based merchants. Visa said it involved  
those who bought from American merchants between September last year  
and June this year - either in person, via the internet or over the  
phone.

Both companies said customers would not be liable for any fraudulent  
transactions.

Visa spokesman Andrew Woodward said 653 cards at high risk of fraud,  
because the data on their magnetic strips was hacked, had been  
cancelled.

The remainder of the 12,000 cards concerned were considered low-risk  
because only part of their data had been captured in the security  
breach.

Mr Woodward said banks would continue to monitor those cards.

MasterCard urged all credit card holders to monitor their statements.

Westpac is reissuing about 4000 cards as a precaution. Spokesman Ian  
Bonnar said 2000 Visa cards and slightly fewer MasterCards had been  
affected but the bank had found no fraudulent transactions.

BNZ has about 2800 affected cards. Spokesman Owen Gill said staff  
would contact all customers concerned and offer to replace the cards  
free of charge.

"It's precautionary, because we think the risk [of fraud] is  
relatively low for most of them," he said.

The bank had been monitoring the situation for several weeks after  
being alerted by an Australian bank but was confident the situation  
was under control.

ASB Bank is monitoring 3000 cards after learning about the fraud at  
the weekend. Spokesman Clayton Wakefield said nothing suspicious had  
been found.

National Bank spokesman Robert Reid said it believed the number of  
its cards affected was low.

Credit card alert

* Credit-card alert 40 million credit cards affected worldwide.
* 12,000 Visa cardholders in New Zealand affected.
* 1000 MasterCard cardholders in New Zealand affected.
* Westpac reissuing 4000 cards.
* BNZ offering to reissue 2800 cards if customers wish.
* ASB replaces 50 "high-risk" cards.




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