Business

MasterCard, VISA warn of massive data breach

Friday, March 30, 2012

VISA and MasterCard are alerting banks across the country about a recent major breach at a U.S.-based credit card processor.

The Wall Street Journal reports that Global Payments, a third-party processor of payment cards, including debit cards, credit cards, and gift cards, had been hit by the security breach.

MasterCard said Friday it has notified law enforcement agencies and issuers of the accounts that are potentially at risk. The credit card company only processes transactions - the credit cards are issued to cardholders by banks such as Citibank and also a number of retailers.

The company advises cardholders who have concerns that they should contact the financial institution that issued their cards. MasterCard says its own systems have not been compromised.

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VISA also began warning banks last week about specific cards that may have been compromised. Visa said in a statement to the Wall Street Journal that it is aware of a possible compromise involving a "third-party entity" affecting card account information from all major card brands. There has been no breach of Visa systems.

The breached credit card processor was compromised between Jan. 21, 2012 and Feb. 25, 2012. The alerts also said that full Track 1 and Track 2 data was taken - meaning that the information could be used to counterfeit new cards.

More than 50,000 cardholders may be at risk.

What steps can you take to protect yourself? Follow these 7 tips from credit.com to monitor your accounts:

1. Call your insurance company or bank to see if you have identity theft management services. Some financial institutions offer this service for free, as a perk for being a member or account holders.

2. Review the breached account. Identify what information it contained and what was compromised. Look for unauthorized activity, such as a change in address or telephone number.

3. Change all user access credentials. If you use the same passwords for other financial institutions, change them. Watch financial statements - on paper and online- for unauthorized transactions. Be aware of potential email, phone and snail mail scams. Enable text and email alerts when possible.

4. Notify existing creditors of the breach. Consider cancelling your cards and getting new ones. Take advantage of issuers' services that alert you to unusual transactions.

5. Place a fraud alert on your credit file. An alert placed with any one of the three major credit bureaus signals to potential creditors that you could be a victim of identity theft. Initial Fraud Alerts last for 90 days and require potential creditors to confirm the legitimacy of your identity before granting credit. Extended Fraud Alerts last for seven years. Victims of identity theft who provide credit bureaus with an identity theft report like this one are eligible.

6. Review your credit reports for any unusual activity. Visit annualcreditreport.com, the government-mandated source for free annual credit reports. Investigate suspicious activity and stay on top of it until the matter is resolved. Also, look for signs of fraud in your medical files, on your Social Security statement, in insurance claims, or in public records.

7. Consider placing a security freeze on your credit report. This may be necessary if you're experiencing fraud as a result of the data breach. A freeze locks access to your credit, so no one will be able to open a new account in your name. To determine whether a freeze is right for you, .

(Information from The Associated Press is contained in this report.) <!--NOTHING BELOW HERE-->

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