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Risk

1/21/2009
11:52 AM
George V. Hulme
George V. Hulme
Commentary
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Heartland Payment Systems' Big Breach & Lame PR Tactic

A recent breach at Princeton, N.J.-based payment processor Heartland Payment Systems, by some accounts, may have totaled tens of millions of individual credit and debit card transactions. And what does the company do? It pulls a cheap PR tactic by announcing the breach on inauguration day.

A recent breach at Princeton, N.J.-based payment processor Heartland Payment Systems, by some accounts, may have totaled tens of millions of individual credit and debit card transactions. And what does the company do? It pulls a cheap PR tactic by announcing the breach on inauguration day.To be clear, Heartland executives won't confirm or deny the actual tally of credit cards that suffered fraudulent transactions. But, according to Washington Post reporter Brian Krebs, on his Security Fix blog, the Heartland Payment Systems breach may have compromised tens of millions of credit and debit card transactions:

If accurate, such figures may make the Heartland incident one of the largest data breaches ever reported.

Robert Baldwin, Heartland's president and chief financial officer, said the company, which processes payments for more than 250,000 businesses, began receiving fraudulent activity reports late last year from MasterCard and Visa on cards that had all been used at merchants which rely on Heartland to process payments.

However, in a story by Thomas Claburn published today, also based on an interview with Heartland's Robert Baldwin, the president and CFO took issue with those high numbers:

Baldwin said his company couldn't yet reveal an accurate number of exposed accounts. "There are some numbers flying around now that are not based on any discussion that Heartland has had with anyone," he said. "They are speculation. ...We just discovered this last week. We have been working around the clock to get data out to the public because it's consequential and we think it's important to be transparent on this."

I have a tough time digesting that Heartland "has been working around the clock to get the data out to the public because it's consequential and we think it's important to be transparent on this."

If the company believes that the information is important to the public because the news is "consequential" and that it's important to be "transparent," then why did the company choose to announce the breach on the day of the presidential inauguration? The decision resulted from either overlooking the obvious: that all eyes of the nation were focused on Washington, D.C.; or the company consciously chose to try bury the bad news on one of the biggest news days of the year.

My bet is on the later, and that's not exactly being transparent, is it?

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