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800 Visa cards blocked Credit union responds to data hacking

Stop Cybercrime By Carol Hazard

Stuck without a debit or credit card?

Someone hacked into a merchant's computer system, compromising information on cards and leaving some bank and credit-union customers without use of cards with the Visa logo.

Virginia Credit Union responded by blocking the use of 800 Visa cards, canceling the accounts and issuing new account numbers and cards. New cards should arrive in the mail this week.

"The compromise occurred as a result of an intrusion into a merchant's data system and was not related to Virginia Credit Union or our card processor," the credit union wrote to members in a letter dated April 30.

"The intrusion does not, in and of it- self, mean that these cards will be involved in fraudulent activity, but it is possible. No fraudulent activity has occurred to date."

Jean Holman, senior vice president at the credit union, said yesterday that some of the closed accounts were debit cards and others were credit cards, depending on which cards were used at the merchant. Holman said she does not know who the merchant is.

The credit union has 131,000 debit and credit cards, most carrying the Visa logo, so the percentage affected was relatively small. However, several financial institutions were apparently dealing with the same mishap.

"It is important for U.S. cardholders to know they are fully protected by Visa's zero-liability policy, which means they pay nothing for an unauthorized purchase," Visa said in a statement regarding the infraction.

"We are currently working with law enforcement and our member financial institutions in this matter to ensure the protection of our cardholders." Visa declined to say how many institutions or cardholders were affected.

A similar incident occurred earlier this year. While this situation involves a merchant, the one in February had to do with a third-party processor. In that case, computer criminals gained access to details of 10.2 million Visa, MasterCard, American Express and Discover credit cards.

Visa introduced new security measures to protect against card fraud and identity theft as a result of the February incident at Data Processor International. It also levied "substantial" fines against the company for the security breach but declined to say how much the fine was.

John Hall, spokesman for the American Bankers Association, said he did not THEFTwant to minimize the consumer hassle in dealing with card fraud. However, consumers are not liable for card fraud, he said.

People need to guard their account numbers, check their statements for unauthorized transactions and immediately report any unauthorized transactions to their financial institutions, Hall said.

Losses from debit-card fraud totaled $157.1 million in 2001 (the most recent year available), compared with check fraud of $693 million in the same year, according to the American Bankers Association.

Holman said the Virginia Credit Union, in addition to writing letters, called all 800 affected customers to inform them of the intrusion. She said people were grateful for the notice.

Special arrangements were made for those who needed immediate use of their cards, she said.

Source: /www.timesdispatch.com

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