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MasterCard Reports Possible Breach

MasterCard Reports Possible Breach

mastercard.jpg When was the last time you paid for something with cash? We are truly moving into the digital age, where even our monetary transactions are done through computers and programming as opposed to the dollar and coin. Plastic is the new black, and has been for the past several years. But now, as our reliance on our debit and credit cards continues to grow, crimes related to credit or debit card theft or fraud continue to rise. You all remember the recent case of Canadian hackers who managed to steal over $250,000 worth of money and purchased equipment. And now, credit card service provider giant MasterCard released a statement today that stated it is investigating a possible breach of cardholder account data involving a U.S.-based payment processor.

“As a result, we have alerted payment card issuers regarding certain MasterCard accounts that are potentially at risk,” the Purchase, N.Y., credit-card company said in a statement.

Law enforcement officials have also been alerted to the possible emergency situation. According to their official statement, they have commissioned an “independent data security organization” to conduct an ongoing forensic review into the situation. The United States Secret Service is also investigating the hacking. MasterCard has also taken the liberty of alerting any banks that distribute their brand of credit and debit cards, alerting them of “certain MasterCard accounts that are potentially at risk.”

According to the official statement, MasterCard says “MasterCard’s own systems have not been compromised in any manner.”

When asked to comment, a spokesperson for MasterCard chose not to comment on how many credit or debit cards may have been compromised, nor did they release the number of banks that they are notifying of the breach.

The breach was first reported early Friday by Krebs On Security, a blog by former Washington Post reporter Brian Krebs. The blog also reported that Visa was also notifying banks about a breach involving a third-party payment processor.

Representatives for Visa couldn’t immediately be reached for comment Friday morning, the Wall Street Journal reports.

Visa and MasterCard do not lend or issue cards to consumers, but instead process transactions for banks that issue their cards and those that handle transactions for merchants.

Representatives of several banks, including Bank of America Corp. and J.P. Morgan Chase & Co., either couldn’t be reached for comment or declined to comment Friday morning, the newspaper reports.

MasterCard said it will “continue to both monitor this event and take steps to safeguard account information.”

Cardholders concerned about their accounts should contact the banks that issued them their cards, MasterCard said.

Sources at two major financial institutions told Krebs on Security that most of the cards they analyzed were apparently used in New York City-area parking garages.

U.S. card issuers’ total losses from credit- and debit-card fraud is an estimated $2.4 billion per year, according to a Consumer Reports article in June. Including merchants, credit card fraud costs U.S. establishments $52.6 billion annually, according to March 2011 Federal Reserve statistics.

In 2008, a group of hackers breached the network of Princeton, N.J.-based payment processing giant Heartland Payment Systems, which processed transactions for restaurants, retailers and other merchants. Data from more than 100 million credit and debit cards were stolen.

AUTHOR - Carlos Reyes

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