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July 16, 2010

  • News:  MC Reaches Settlement With Heartland

    MasterCard Inc. announced on Thursday that a settlement has been reached by nearly all of the banks involved in the Heartland security breach. The data security breach occurred back in 2008 and is considered to be the largest debit and credit card data breach in history. According to MasterCard, the second largest debit and credit card network in the world, in order for the settlement to be accepted by all parties involved, approval by 80 percent of the banks involved were required; 99 percent accepted the Heartland Payment Systems, Inc.'s offer. The security breach is said to have compromised more than 130 million debit and credit card numbers. Banks should begin receiving payment sometime in September. Terms of the settlement include the banks waiving any future claims against Heartland for the incident involved.

    Wendy Murdock, Chief Franchise Officer for MasterCard Worldwide said that the company is very pleased with the outcome of the settlement. The agreement is aimed at covering the majority of costs that banks issuing MasterCard credit cards suffered resulting from the millions of dollars of theft. In the settlement, Heartland Payment Systems agreed to pay MasterCard issuing banks $41.4 million. Banks issuing credit cards that were involved in the breach and where theft had occurred suffered losses resulting from their zero liability policies. Many of the stolen cards were sold on the internet by individuals who used them to rack up thousands of dollars in merchandise and cash advances each.

    The ring of thieves was lead by the infamous Albert Gonzalez who is now spending time in prison for his role in the data breach. Gonzalez and his ring acquired the lists of Fortune 500 companies and then visited their stores to determine their vulnerability. After observing the merchants electronic payment systems and hacking into their online sites, the thieves discovered flaws in Heartland's programming language. Sniffer programs were place on the corporate networks to intercept the credit card information during transactions. The sniffer program then transmitted the information to other computers placed strategically in the U.S., the Netherlands, and the Ukraine.

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