May 7, 2009
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News: Heartland Pays $12.6 Mil in CC Breach
Heartland Payment Systems, one of the nation’s prominent credit card processing companies experienced one of the largest breach of securities in history. Heartland announced the breach in January 2009 which is said to have taken place as far back as May 2009. In light of the fact that Heartland had received several reports on suspicious credit card activity, the company is alleged to have taken no action. Heartland, on the other hand, maintains that they responded appropriately and took vigorous action to address the breach. As a result, Heartland has been hit hard by several lawsuits and is subject to potentially large fines from both Visa and MasterCard whom Heartland is a Payment Card Industry Data Security Standard (PCI DSS) service provider. Visa suspended the company from its PCI DSS provider list in March; however, announced on May 1st that it was returning Heartland as a validated credit card processing provider. The move was made in light of Visa’s security assessment which indicated that Heartland had successfully completed its compliance with the data security system.
The breach sparked an FBI investigation which discovered the credit card data stealing program planted in Heartland’s system. The exact number of accounts compromised is not yet known; however, speculation is estimated at nearly 100 million. Information compromised by the breach includes credit card numbers and other data embedded in the card’s magnetic strips. Last week, Heartland released estimated figures of the company’s fines and litigation costs associated with the breach at $12.6 million with the potential to climb higher. Of the $12.6 million, $6 million is allocated to fines imposed by MasterCard which Heartland intends to fight.
Shortly after discovering the breach, both MasterCard and Visa began notifying banks instructing them to contact credit card customers of the breach and to check their card statements for any suspicious activity. Additionally, both organizations advised card issuers to offer fraud protection programs and card replacement to any customers whose transactions had been processed through Heartland. Heartland services over 200,000 customers which include restaurants and retailers across the country and boasts to open up an average of 5,500 new accounts each month.