September 02, 2010
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News: Heartland Settles With Discover On Security Breach
Heartland Payment Systems must once again dish out the bucks for payment of restitution for one of the nation's biggest security breach which compromised millions of credit cards. The latest settlement is between Heartland and Discover Financial to the tune of $5 million. The $5 million is to give Discover back a portion of the losses it felt when the company reimbursed credit card customers fraudulent card transactions resulting from the 2008 security breach. According to a statement released by Heartland Payment, Bob Carr, the company's Chairman and Chief Executive Officer said the payment to Discover will be the final payment to a credit card issuer resulting from the breach. Carr's statement called the settlement an "intrusion settlement."
Heartland Payment Systems is one of the nation's most prominent credit card processing companies. In January 2009, the company announced that it had become the victim of one of the largest security breaches in history. It was discovered that in spite of the fact that Heartland had received several reports on suspicious credit card activity, the company is alleged to have taken no action. Heartland defended itself by saying that it had responded appropriately and took vigorous action to address the breach. Heartland was hit hard by several lawsuits and became subject to potentially large fines from both Visa and MasterCard whom Heartland is a Payment Card Industry Data Security Standard (PCI DSS) service provider.
The exact number of accounts that were compromised in the Heartland breach; however, it is estimated that it involved over 130 million card accounts. Information that was compromised by the breach included credit card numbers and other data embedded in the card's magnetic strips. Thieves obtained the card data after breaking into Heartland's systems and planting malicious software. It is estimated that the breach cost Heartland over $60 million.