Originally published July 31 2005
Visa and Mastercard cut ties with CardSystems
by Mike Adams, the Health Ranger, NaturalNews Editor
After more than 40 million credit and debit card accounts were made vulnerable to hackers, Visa USA Inc. and American Express Co. are cutting ties with CardSystems.
Visa USA Inc. and American Express Co. are cutting ties with the payment-processing company that left 40 million credit and debit card accounts vulnerable to hackers in one of the biggest breaches of consumer data security.
She said banks that issue Visa cards would have until Oct. 31 to replace CardSystems with one of the hundreds of other payment-processing companies in the U.S.
CardSystems told the FBI it learned of a potential breach of its computer network on May 22, and the break-in was publicly disclosed last month.
While information relating to 40 million accounts was laid bare in the break-in, credit card companies have said at least 200,000 were known to have been stolen, primarily MasterCard and Visa cards.
Visa said that while CardSystems has taken some remediating actions since the breach was disclosed, those could not overcome the fact that it was inappropriately holding on to account information - purportedly for "research purposes" - when the breach occurred, in violation of Visa's security rules.
The credit card company expects CardSystems to develop a plan for improving its security by Aug. 31, "and as of today, we are not aware of any deficiencies in its systems that are incapable of being remediated," spokeswoman Sharon Gamsin said.
"However, if CardSystems cannot demonstrate that they are in compliance by that date, their ability to provide services to MasterCard members will be at risk," she said.
A spokeswoman for Discover Financial Services Inc., which also has a relationship with CardSystems, declined to comment.
Privately held CardSystems, headed by a former Visa executive, has 115 employees in Atlanta and Tucson, Ariz., where its system was hacked.
Backed by such investors as Principal Financial Group Inc., CardSystems has been in business for more than 15 years and processes more than $15 billion in payments annually.
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