Banks defend delay in notifying customers of security breach

Australian banks are today still checking the accounts of nearly 130,000 credit card holders hit by a security breach that occurred in the US late last year.

Australian customers were only officially advised of the breach by MasterCard this week even though the credit card information was stolen six months ago during a major US fraud case.

The banks involved claim they couldn't disclose details any earlier due to a Police investigation.

About 130,000 credit card holders in Australia are among the 40 million people worldwide who were exposed to a security breach at a US company that processes credit card transactions, CardSystems Solutions Inc.

MasterCard, which has been investigating the security breach since late last year, only told Australian banks a few days ago of the results of its probe and who may have been affected.

Australians potentially affected are those who made transactions either while travelling in the US, or by purchasing items from the US over the Internet since September last year.

MasterCard was alerted last year to the problem by financial institutions around the world - including Australian banks.

MasterCard said 50,000 of its Australian customers' accounts had been compromised, while 80,000 Australian Visa customers were involved. The banks are now checking those accounts for any unauthorized transactions.

MasterCard's vice president of securities and risk Tim Morris defended the length of time taken for the issue to be made public, saying MasterCard first wanted to get its detailed forensic investigation into CardSystems right.

"If you get it wrong, the results can be devastating," he said.

All four major Australian banks - National Australia Bank, the Commonwealth Bank, Westpac and the ANZ - said their security systems had detected a problem earlier in the year and were aware there was an issue.

The Australian Bankers Association said the security detections found 2000 customers who had fallen victim to fraudulent transactions linked to CardSystems and those customers had already been issued with replacement cards.

Westpac rejected suggestions it did not know about the problem until yesterday.

"Our processes worked very well," a Westpac spokesman said.

Communications Minister Helen Coonan said the security breach in the US emphasized the need for tough financial security measures in Australia. "The attack highlights the need for strong security and authentication procedures for companies involved in the processing and handling of sensitive financial and personal information," Senator Coonan told parliament yesterday.

"It reinforces the need for the Australian government and industry to remain vigilant on these security issues."

However, Senator Coonan refused to answer questions by Labor senator Ruth Webber as to when the government became aware of the security breach and why Australians weren't told about it earlier.

Senator Coonan said the government had various joint initiatives in place to protect credit card and online transactions.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sandra Rossi

Computerworld
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?