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MasterCard breach could hit 40m cards

The names, banks and account numbers of up to 40 million credit card holders may have been accessed by an unauthorized user, MasterCard International said.

The credit-card giant said on Friday the security breach involves a computer virus that captured customer data for the purpose of fraud and may have affected holders of all brands of credit cards.

It said the breach was traced to Atlanta-based CardSystems Solutions, which processes credit card and other payments for banks and merchants.

The compromised data did not include addresses or Social Security numbers, said MasterCard spokeswoman Sharon Gamsin. The data that may have been viewed -- names, banks and account numbers -- could be used to steal funds but not identities.

Gamsin said she did not know how a virus-like computer script that captured customer data got into CardSystems' network, which MasterCard said was infiltrated by an unauthorized individual. Neither company would elaborate.

The FBI was investigating.

The incident was the latest in a series of security breaches affecting valuable consumer data at major financial institutions and data brokers in an increasingly database-driven world.

The breach appears to be the largest yet 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.

A flurry of disclosures of breaches affecting high-profile companies including Citigroup Inc., Bank of America Corp and DSW Shoe Warehouse has prompted US federal lawmakers to draw up legislation designed to better protect consumer privacy.

MasterCard, which said about 14 million of its own cards were exposed, first announced the breach in a news release on Friday afternoon, saying it was notifying its card-issuing banks of the problem.

However, CardSystems said late on Friday in a statement vetted by the FBI that it first learned of a potential breach on May 22. It said it was told by the FBI not to release any information to the public.

The company said it was surprised by MasterCard's decision to go public.

"We were absolutely blindsided by a press release by the association," CardSystems' chief financial officer, Michael Brady, said when reached on his mobile phone.

He refused to answer any questions and referred calls to the company's chief executive, John Perry, and its senior vice president of marketing, Bill Reeves.

Reeves said the information the company gathered initially was "on a need-to-know basis."

He said he could not comment beyond the company's statement, but noted that CardSystems is implementing increased security measures.

"I understand and fully appreciate the seriousness of the situation," Reeves said.

Sobel said the fact that the latest breach involved a third party "indicates that this is a shadowy industry where the consumer never really knows who is going to be handling and using their personal information."
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