The head of the card processing firm blamed for a security breach affecting anything up to 40m credit card numbers has admitted it wasn't supposed to hold the compromised data. John M. Perry, chief exec of CardSystems Solutions, told the New York Times that the data was being kept for "research purposes".
MasterCard said that the [unencrypted] data - which included customers names, card numbers and cvv (security) codes but not customer addresses - had been "inappropriately retained" by CardSystems, the paper reports.
The exact mechanism of the data theft remain unclear but the New York Times reports that records "known to have been stolen" covered roughly 200,000 of the 40m potentially compromised credit card accounts, from MasterCard and other card issuers. Ironically this data was stored in a file held by CardSystems in order to carry out unauthorised research into why particular transactions had registered as unauthorised or uncompleted. This data was exposed because of "security vulnerabilities in the processor's systems," Mastercard said in a statement.
CardSystems handles approximately $15bn in transaction per annum for 105,000 small and midsize merchants and financial institutions. MasterCard has put CardSystems on notice and given it a limited amount of time to comply with its security standards. CardSystems said that it has "remediated" its procedures since the incident.
The security breach came to light after MasterCard and an unnamed bank, together with computer forensics firm Ubizen, traced unusually high levels of fraud identified in mid-April back to problems at CardSystems. CardSystems said it reported the security breach to the FBI in May 23, the day after security experts nailed the source of the security breach. MasterCard, which went public on the problem on 17 June, is the only card issuer thus far to trace specific instances of fraud back to CardSystems. However other card issuers may been hit and the scope of fraudulent activity caused by the breach remains unclear.
The MasterCard flap is the latest - and by far the most serious - in a growing line of information security breaches affecting the handling of consumer data. ®