1.5 million card numbers at risk from hack

[BABY1]

TweetNEW YORK (CNNMoney) -- A data breach at a payments processing firm has potentially compromised up to 1.5 million credit and debit card numbers from all of the major card brands.

Global Payments, a company that processes card transactions, confirmed late Friday that "card data may have been accessed." It says it discovered the intrusion in early March and "promptly" notified others in the industry.


Global Payments released a statement late Sunday with more details. The company said that while more than 1 million card numbers may have been compromised, cardholder names, addresses and Social Security numbers were not affected.

That's a sizeable breach, but it affects just a small fraction of the estimated 1 billion debit and credit cards in circulation in the U.S.

Global Payments did not say which card companies were affected, but Visa released a statement on Friday saying that it was all of the big players.

MasterCard (MA, Fortune 500) says it has alerted payment card issuers "regarding certain MasterCard accounts that are potentially at risk." Discover (DFS, Fortune 500) and American Express (AXP, Fortune 500) say they are monitoring the situation.

Global Payments held a conference call Monday morning to provide more details on the debacle. Executives stressed that an investigation is ongoing. Until that is complete, they're holding off on going into specifics on how the hack happened. On Saturday, a U.S. Secret Service spokesman said the agency also is investigating the incident.

Still, Global Payments said the breach was limited to only "a handful of servers," and appears to be confined to accounts in North America.

The company's CEO, Paul Garcia, said it was working with its customers closely to contain the damage.

"These are thieves, these are bad guys. These are people who want to hurt all of us," Garcia said during the call. "We're working together on it."

For customers, the best thing to do is sit tight. If your card issuer thinks your account may have been compromised, they'll contact you -- and no matter what, you're not liable for unauthorized charges made on your account.

All major card brands: Global Payments' Garcia insisted his company will pull through, but it's already suffering fallout. Global Payments' (GPN) stock fell 9% Friday before trading was halted mid-day; it did not resume before the market closed.

Late Sunday, Visa (V, Fortune 500) spokeswoman Sandra Chu confirmed to CNN that Visa had removed Global Payments from its list of preferred credit-card processors.

When a customer swipes a credit card, the data is sent to a payment processor like Global Payments, which then forwards the transaction information to card companies like Visa and MasterCard.

That's a massive business: Global Payments processed $167 billion worth of transactions in its last fiscal year, which ended May 31, 2011. Global Payments specializing in serving small merchants, like mom-and-pop businesses and local retailers.

When payment processors get hacked, the shrapnel can spread far. The record holder for the largest-ever breach is believed to be a 2008 attack on Heartland Payment Systems (HPY), in which an estimated 130 million customer accounts were compromised.

Heartland eventually paid more than $110 million to Visa, MasterCard, American Express and other card associations to settle claims related to the breach.

In data breach situations, credit card companies generally offer affected customers fraud monitoring services at no cost -- and customers aren't on the hook for any fraudulent charges. The card issuers themselves are responsible for those costs.

"Our merchants and our customers understand that this will make us even stronger," Global Payments' Garcia said on Monday's call. "'Business as usual' sounds a little trite, but that's what we're trying to get to."

[yamaha147]

TweetIts amazing how capable hackers are nowadays

[tn94z]

TweetThe scariest thing is that in most cases, the hackers have been in the system for months before they are ever caught.

[daved150]

Tweetyea...its only a matter of time before EVERYONE has been a victim of cc froud...we've had it happen to us twice