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CRACKER INTERCEPTS VISA DEBIT CARD DATA

Posted on September 10, 2001

      While Visa International is touting its initiatives to better protect credit card use over the Internet, banks in the Washington, D.C., area were alerting thousands of Visa debit cardholders that a cracker may have gotten hold of their personal data. Authorities believe someone intercepted a file containing purchase data from an area online merchant. but haven't released how the information was stolen, according to published reports.

      Three banks -- Riggs, SunTrust and First Virginia -- each cancelled 500 to 3,000 customer debit cards in recent weeks after learning an unidentified D.C. area merchant's customer database was compromised. The file contains debit card numbers, expiration dates and telephone and address information. No reports of fraud have been reported, but affected cardholders are being told to scrutinize checking account statements for unauthorized debit purchases.

      News of the theft comes as Visa continues to publicize its Visa Authenticated Payment system, which offers additional online shopping protection by adding a password layer to real-time cardholder identity verification. In addition to improving e-merchant's payment service, the additional security is hoped to halve the number of charge backs due to transaction disputes.

      "Consumers will know that they can shop safely and conveniently while preventing fraud on their card, and e-merchants will know they are dealing with a legitimate cardholder anywhere in the world," said Visa International CEO Malcolm Williamson in a prepared statement.

      Earlier this year Visa required all e-merchants accepting its credit and debit cards to post their privacy policy and transaction security capabilities on their Web sites. All merchants accepting Visa also must abide by 12 basic security measures, such as installing network firewalls, keeping up with security patches and encrypting stored data accessible via the Internet.

      The company began mandatory security audits this summer to check for compliance. The company says some 14,000 U.S. financial institutions rely on Visa's processing system to facilitate more than $810 billion in annual transactions, including more than half of all Internet payments.

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