A payment-card processor's network, which handles transactions for Visa and MasterCard (News - Alert) alike, has reportedly been breached. As a result, more than 10 million card numbers may have been compromised.
Banks nationwide were put on alert following the breach with warnings that specific payment cards may have already been used fraudulently. MasterCard went on record saying they were currently conducting their own investigation into the possibility of a breach, stating their concern over any possibility that cardholders could be inconvenienced. MasterCard also stated that none of its own systems had been compromised in the breach. Visa, for its part, is planning to issue a statement later on.
Investigators are currently suspecting, according to reports from USA Today, Dominican street gangs that managed to enter the system via a series of knowledge-based authentication questions and that the fraud is currently targeting commercial credit and debit card accounts. The breach is being described as “mushrooming”, so even those accounts not currently affected may well be in the days to come. Regardless of where the breach originated, the onus will now fall on card issuers to make their potentially affected customers aware of the situation.
Stronger laws have recently been put in place for data breach disclosure. These new laws mean that banks and credit unions alike will be hard pressed to rapidly notify the potentially affected cardholders. Failure to do so in a sufficiently rapid fashion, or failure to meet a variety of disclosure requirements, could result in stiff fines levied against the merchants that issued the cards. One case suggested that one million customers across ten states who were affected and the resulting fines from that hypothetical case reached $1.6 million.
With the world economy still unsteady at best, incidents such as these will likely increase, and their severity will also likely worsen. It will prove to be a prudent move to keep an eye on personal credit card usage in the coming months as events like these crop up.