Some 9,000 Chinese accounts put at risk By Zhao Renfeng (China Daily) Updated: 2005-06-23 00:29
Nearly 9,000 Chinese credit card holders' accounts have been exposed to
potential fraud because of a security breach at a US-based card data processing
company last week, Visa and MasterCard have admitted.
 |
A
man stands before a MasterCard poster during a promotion activity in
Nanjing on February 14, 2004. [newsphoto/file] | A statement released by Visa said yesterday about 3,100 Chinese Visa
cardholders are at risk, while MasterCard announced that up to 5,560 of its
cardholders in China could be affected by the security breach at CardSystems in
Tucson, Arizona.
The security breach, in which hackers had access to 40 million credit card
accounts, was first reported last Friday by MasterCard in the United States.
About 22 million were Visa accounts, 13.9 million MasterCard, and the rest
were American Express and Discover accounts. The head of CardSystems has
acknowledged his firm should not even have been keeping the consumer records in
the first place.
Both Visa and MasterCard have pledged to limit the risk to cardholders as
much as possible. The companies said they have not yet identified any definite
instances of fraudulent transactions relating to Chinese mainland cardholders.
American Express also said it was not aware of any fraudulent activity
related to the incident, but did not give the number of mainland cardholders
affected.
Chinese cardholders who may be vulnerable to potential risks are those who
used credit cards in the United States between August 1, 2004 and May 27, 2005,
according to the Peony Card Centre of Industrial and Commercial Bank of China
(ICBC), the nation's largest lender.
Li Lei, executive vice-president of the Peony Card Centre, told reporters
yesterday that less than 500 of ICBC's credit card accounts were affected by the
breach. The centre has set up a special team to deal with the incident and is in
the process of replacing cards compromised by the hackers. Account holders will
not have to pay fraudulent charges run up on their cards.
The People's Bank of China, the central bank, yesterday also expressed "grave
concern" at the incident. It asked Visa and Mastercard to "properly handle"
problems resulting from the security breach that concern Chinese cardholders.
International card organizations stressed that exposed data may not
necessarily lead to credit card fraud, but Visa and MasterCard said they are
teaming up with issuing banks in China to replace all the affected cards to ease
security concerns.
"The Chinese credit card market is still in a budding period. We have to try
our best to restore confidence in the market," said Zhang Yumu, Visa's
spokesperson in China.
Visa, MasterCard and American Express have all been launching aggressive
forays into China's emerging credit card market.
CardSystems processes more than US$15 billion in payments for small- to
mid-sized merchants and financial institutions in the United States. It is one
of hundreds of processors that provide terminals to merchants and help banks
process millions of transactions a day, electronically relaying cardholders'
names, account numbers and security codes so that once a card is swiped, the
sale will be authorized, the merchant paid and the customer
billed.
|