February 16,2009
-
News: Heartland Victim Reports; Several Were Students.
So far, about 220 credit card issuers have been notified that some of their clients' accounts have been compromised. So, all of these lenders now have to inform those victims, close the credit card accounts and issue new replacement accounts to very displeased customers. A class action suit has already been filed against Heartland Payment Systems just over this matter. But the story goes deeper. Although the major card associations (like VISA and MasterCard) provide consumer protection by limiting liability to only $50 and they usually don't even require any liability, credit card victims remain shaken even if the fraud doesn't cost them financially.
Typical, is the case with the Credit Union at the Oshkosh campus of Univ. of Wisconsin. About 65 of their clients are victims. Even though the CU has about 4,000 members, having 65 of your credit card accounts stolen delivers a grave public image. Heartland Processing Systems itself is somewhat buffeted from direct public confrontation because they are the in-between agent where merchants and lending banks meet. So, Heartland's involvement is comprised of dealing with businesses from both directions, all making money on Heartland's processing system. It's the credit card lending institutions who must deliver the bad news individually to the general public.
This is the message that Scott Chicoine, President and CEO of the UWO Credit Union is trying to get across. Although financial institutions must deal with processors like Heartland, they have no ‘business link'…they only exchange ‘electronic money'. The Processors are linked to the merchants while the credit card lenders are linked to the consumers. The banks should be held blameless in this case.
It's estimated that, as many as, 1.5 million credit card accounts could have been compromised. Some of the less-bad news is that secure personal information like Social Security numbers and other vital ID information has not been compromised. This does lessen risk some and makes the data less valuable to thieves.