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Security breach could affect 40 million

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Security

A security breach of customer information at a credit card-processing company could expose to fraud up to 40 million cardholders of multiple brands, MasterCard International Inc. said Friday.

The credit card giant said its security division detected multiple instances of fraud that tracked back to CardSystems Solutions Inc. of Tucson, Ariz., which processes transactions for banks and merchants.

MasterCard said in a news release late Friday afternoon that it was notifying its card-issuing banks of the problem.

CardSystems was hit by a computer virus that captured customer data for the purpose of fraud, said company spokeswoman Sharon Gamsin. The FBI was investigating.

MasterCard, which said about 14 million of its own cards were exposed, said it was giving CardSystems a ``limited amount of time to demonstrate compliance with security requirements.''

John Perry, chief executive officer of Cardsystems, did not immediately return calls. Nor did officials from American Express and Visa; Discover had no immediate comment. MBNA, a large issuer of cards, also did not immediately return a call.

The breach is the latest in a series that has hurt a number of high-profile companies -- including Citigroup Inc., Bank of America Corp. and DSW Shoe Warehouse.

It also appears the largest involving financial data, said David Sobel, general counsel at the Electronic Privacy Information Center.

``The steady stream of these disclosures shows the pressing need for regulation of the industry both in terms of limitation in the amount of personal information that companies collect and also liability when these kinds of disclosures occur,'' Sobel said.

That the breach involved a third party also ``indicates that this is a shadowy industry where the consumer never really knows who is going to be handling and using their personal information,'' he added.'' Presumably, the affected consumer thought they were dealing with MasterCard.''

Earlier this month, Citigroup said United Parcel Service lost computer tapes with sensitive information from 3.9 million customers of CitiFinancial, a unit that provides personal and home loans.

There have also been breaches involving other kinds of sensitive data.

ChoicePoint Inc. said in February that thieves using stolen identities had created 50 dummy businesses that pulled data including names, addresses and Social Security numbers on as many as 145,000 people.

In March, LexisNexis Inc. disclosed that hackers had commandeered a database and gained access to the personal files of as many as 32,000 people.

The company has since increased its estimate of the people affected to 310,000. Information accessed included names, addresses and Social Security and driver's license numbers, but not credit history, medical records or financial information, corporate parent Reed Elsevier Group PLC said in a statement.

``Hardly a week goes by without startling new examples of breaches of sensitive personal data, reminding us how important it is to pass a comprehensive identity theft prevention bill in Congress quickly,'' said Sen. Charles Schumer, D-N.Y.

Associated Press

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