CardSystems Flaw Shows Deep Credit-Card Security Problems

Avivah Litan, Gartner Research

A lawsuit against CardSystems Solutions and others shows that the courts are taking personal security seriously. But the fault for the CardSystems breach lies with the entire industry security ecosystem.

On 4 August 2005, a California court ordered the credit-card payments processor CardSystems Solutions and three other defendants (MasterCard International, Merrick Bank and Visa USA) in a class-action lawsuit to retain all evidence related to a huge credit-card security breach. The breach ? first made public in July 2005 but apparently identified many months earlier ? exposed CardSystems-held information on 40 million credit-card accounts, including 22 million Visa, 14 million MasterCard and 1.6 million American Express accounts. Visa and American Express have announced plans to terminate their relationships with CardSystems; MasterCard has stated that it will review its relationship with CardSystems.

The California order shows that the courts are taking the exposure of personal information increasingly seriously, and need cooperation from many different industry players to get to the bottom of the situation.

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