Visa probes reported security breach of card processor
17,000 cards already blocked
issuer company Visa is investigating the possible breach of a payment processor in Europe that may have compromised more than 10,000 cards in Eastern Europe.
In a statement issued on Thursday, according to IDG News, the issuer said: “Visa Europe has been informed of a potential data security breach at a European processor and an investigation is underway. We are working closely with our member banks to ensure cardholders are protected.”
The statement didn't name the processor or the country where it's located.
The statement came a day after a news article published by Romania Business Insider cited Visa Europe's general manager as saying Romania's CEC Bank blocked 17,000 payment cards because of suspicions they had been compromised.
A statement issued by CEC Bank, according to SC Magazine, said: “The bank has been informed that a number of cards issued by banks in Romania and abroad have been potentially compromised through an international database. CEC Bank has decided to block the cards and reissue a new card and PIN, at no cost, for a number of cards in its portfolio.”
The statement went on to say that the attack didn't target the bank's customers specifically and wasn't the result of any vulnerabilities inside the bank's system. The Romanian Association of Banks issued its own statement (PDF) that said multiple banks have been alerted to a potential security breach that may have exposed credit card data.
The potential breach of the processor comes almost three years after US-based processor Heartland Payment Systems disclosed a massive security breach that ultimately cost a whopping $105 million in fines and other expenses. Serial hacker Albert Gonzalez eventually pleaded guilty to masterminding the attack on Heartland and various other holders of payment information in a breach that compromised some 130 million cards.
At the end of the day it's always amusing to read about credit card fraud with issues related to the non-cardholder.
I had an experience working with a merchant account provider that turned out to be fraudulent. IE. they claimed to have 2 banks backing them and when we became suspicious of them contacted each bank to verify the relationship and surprise surprise neither bank knew who they were nor had any relation with them.
So we went through the usual channels and eventually contacted visa/mastercard to advise them of the wrongdoing. Guess what? I couldn't even get in contact with one of them and the other didn't even know where to transfer me to for issues like this.
So none of this ever comes as a surprise to me.
Is not PayPal secure ?
Credit cards could follow the same process.
Two words: Heartland Processing
Really? Like this could actually come as a surprise to anybody? Given that there are a significant number of hops between each time a credit card is used and the issuing bank (most of which are outsourced to heaven knows where), I'm actually surprised that there's not more identity theft and transaction fraud.
A friend and business associate of mine lost one of her businesses because of the crap that went on inside of Heartland. But the truly sad thing is that Visa/MC automatically assumed that her business was to blame and required her to spend close to $100,000 on audits and security remediation, none of which was credited back to her, when it was Heartland. But that's water under the bridge.
Maybe the Credit Card industry should take a good hard look at PCI, as well as the number of third party transaction processors they have, handling our information. And instead of jacking up interest rates, usage fees and other such hidden surcharges (used to cover their losses) maybe they should start penalizing the people in the middle, the processors.