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No New Payment Processor Data Breach After All

Visa says notice to card issuers was part of a known breach, but won't reveal which one
Turns out word about a new payment-card processor data breach was a false alarm: After several credit unions posted notices in the past couple of weeks warning that Visa had alerted them to a new payment processor breach, Visa now says the alerts were related to an existing, known breach.

"The recent alerts Visa sent to card issuers were part of an existing investigation and are not related to a new compromise event," Visa said in a statement issued late last week.

But Visa wouldn't say just what organization or breach it was referring to.

Financial institutions had been on alert for another possible payment processor breach separate from Heartland Payment Systems and RBS WorldPay. Several credit unions and organizations posted warnings on their Websites, including the Community Bankers Association of Illinois, the Tuscaloosa VA Federal Credit Union, and the Pennsylvania Credit Union Association. The Open Security Foundation also posted a notice on its DataLossDB Website.

The organizations said they had been alerted by Visa and MasterCard that the breach had exposed so-called card-not-present transactions (online and call-based transactions), rather than magnetic-strip track data. Primary account numbers and expiration dates were stolen from the firm's settlement system, according to these reports. "As the entity involved has not yet issued a press release, Visa and MasterCard are unable to release the name of the merchant processor. It is important to note that this event is not related to the Heartland Payment Systems breach," the Tuscaloosa VA Federal Credit Union said on its site.

Word of a possible third payment-processor hack came just weeks after Heartland Payment Systems' disclosure on Jan. 20 that it had discovered malware on its servers. Heartland, which is under investigation by various government entities, including the Department of Justice and the Federal Trade Commission, processes 100 million payment card transactions per month for 175,000 merchants.

Meanwhile, it's unclear what caused all of the confusion about the latest credit card breach warnings, which led to Visa's issuing a public statement that there was no new hack.

"Visa has provided the affected accounts to financial institutions so they can take steps to protect consumers. In addition, Visa is risk-scoring all transactions in real-time, helping card issuers better distinguish fraud transactions from legitimate ones," Visa said in its statement.

"It's essential that every business that handles payment card information adhere to the highest data protection standards to protect the security and privacy of their customers' financial information. Visa is aggressively partnering with businesses and financial institutions to enhance security surrounding debit, credit and prepaid card information," the statement said.

MasterCard, meanwhile, said in a statement that it is "monitoring developments" in this case and has notified the affected card issuers. "Because this incident is the subject of an ongoing investigation, we cannot disclose additional details regarding the incident or otherwise comment at this time," the company said.

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