Wednesday, June 22, 2005

Cardsystems Violated Mastercard/Visa Credit Card Rules

It has now come to light that in the recent breach of up to 40,000,000 credit accounts, Cardsystems was gathering information on people that they weren't allowed to. Allegedly, it was to determine why certain transactions wouldn't process.

There are also reports out of Australia that this fraud was spotted six months ago by banks over there, which again makes one wonder exactly who knew and when. The scope of this breach is far reaching, with cards in Europe, Asia and Australia being reported compromised.

In the end, many are saying that in previous years, this breach probably would have gone unreported and that these breaches are being reported now due to recent legislation in California, which requires disclosure.

It is apparent that more of this sort of legislation should be considered. There should also be outside auditing/investigations of these occurrences to protect the consumer and determine if laws were violated for profit incentives. Another thing to consider is that these types of intrusions are likely to erode consumer confidence, which can take a devastating toll on the financial well being of these organizations. The time for effective action is now.

No comments: