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Data-security breach at card processors and U.S. banks

March 31, 2012

Card-payment processors and large U.S. banks that issue debit and credit cards were hit by a data-security breach after third-party services provider Global Payments Inc discovered its systems were compromised by unauthorized access.

Global Payments said it determined that an unauthorized entity had accessed its systems and possible customer card data in early March. Global Payments helps card companies processes electronic transactions for merchants.

U.S. law enforcement authorities including the Secret Service are investigating and MasterCard said it has hired an independent data-security organization to review the incident.

MasterCard announced earlier Friday that it was investigating whether cardholder account data was improperly accessed. The payments company said it has alerted law enforcement authorities and notified card issuers about the potential breach of cardholders’ account

Visa said in a statement Friday that it was “aware of a potential data compromise incident at a third-party entity affecting card account information from all major card brands.” The company emphasized that there had been no breach of any Visa system, “including its core processing network VisaNet.”

Citigroup Inc said it has been notified by processors of the breach, while Wells Fargo & Co said it was too early to comment on the impact. No comment issued by Bank of America Corp.

JPMorgan Chase & Co, as well as American Express and Discover, which issue their own cards, said they are monitoring customers’ accounts and would issue new cards to anyone whose information may have been compromised.

Banks and processors emphasized customers would not be held liable for any fraudulent charges that may occur. Any financial losses from the data breach would be shouldered by merchants, card issuers and Global Payments rather than Visa or Mastercard, which operate payment networks.

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