Monday, January 19, 2009

Hackers Affect Debit and ATM Networks, Corbin, KY - Hackers affect debit and ATM networks

Forcht Bank disabled 8,500 customer debit cards this week after learning they could have potentially been hacked into by persons creating duplicate cards.

Eddie Woodruff, chief operations officer for the bank, confirmed that 8,500 of the bank’s roughly 22,000 total debit cards had been deactivated, but the move was primarily a precaution.

“Right now, none of our customers have reported any fraudulent activity on the cards,” Woodruff said. “We’re just trying to take every precaution.”

The cards were comprised when a retail merchant’s computer system was hacked, Woodruff said. The breach affected customers of multiple banks and multiple debit and ATM networks.

“Our debit card processor, which is a company called STAR, they had a retail customer, we’re not exactly sure who the retail customer was, and the information we believe may have been compromised,” he said.

First Data Corporation, which operates the STAR Debit and ATM Network, would not comment on how many other banks were affected, but did release in a statement Monday that "the debit card issue we were alerted to could affect not only STAR but also other debit networks."

The STAR system is used by 2 million ATM and retail locations across the country, according to its Web site.

“While we do not comment on specific matters pertaining to our customers, we can tell you this situation is not related to any First Data processing systems or practices,” stated Nancy Etheredge, spokesperson for First Data. “We are working with our clients, the card associations and card issuing and acquiring banks to monitor and help mitigate the issue and protect consumers.”

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Money Transfer Network adds 33,000 locations

Minneapolis, Jan. 19, 2009 -- MoneyGram International (NYSE: MGI) today announced that in 2008 the company added 13 countries and territories and more than 33,000 locations to its global network, helping people and communities around the world by providing more convenient choices for safe and reliable money transfer services.

"Our continued growth--both international and domestic--is a reflection of growing consumer demand, fueled by ongoing global migration trends and our ability to deliver value to our customers and agents across the globe," said Tony Ryan, MoneyGram chief operating officer and executive vice president.

"MoneyGram's diverse, global agent network is our competitive advantage," said Ryan. "We will continue to invest in strategic growth by adding agent locations in key growth areas as well as expanding existing agent relationships, and growing our owned-retail presence."

In 2006, in response to business and market needs, MoneyGram launched its owned-retail strategy in France and Germany, and today operates more than 50 stores and kiosks in high-traffic areas in immigrant communities. Half of the countries joining MoneyGram's network last year are French-speaking, reflecting the company's commitment to serving the needs of France's large immigrant population. According to the World Bank, France is a top-five immigration country with 6.5 million immigrants.

"Our growth in France was vital to adding Algeria, which according to the World Bank, produced the largest influx of immigrants into the country," Ryan said. "Today, we have stronger prospects in the country for expansion through more traditional agent locations."

Germany is a similar success story for MoneyGram. The company established service to Serbia this year, which produces a high volume of immigrants to the country. MoneyGram has 30 owned locations strategically located in Germany.

"Network breeds network and feeds both expansions to new countries and increased locations in key areas around the globe," Ryan said. "The more we grow, the more interested retailers, post offices and financial institutions are in seeking our service to expand and grow their own businesses and offer more services to their customers."

Countries and territories added to MoneyGram's global network include the French-speaking Algeria, Central African Republic, Comoros, French Polynesia, Gabon, Madagascar and New Caledonia. Other countries include Angola, Bermuda, Bhutan, Czech Republic, Serbia, and Slovenia.

About MoneyGram International, Inc.

MoneyGram International, Inc. is a leading global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with approximately 176,000 global money transfer agent locations in 180 countries and territories. For more information, visit the company's website at .

Source: Company press release.

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Dilllard's to Use "Planet Payment" Service

Edited Press Release

LONDON -(Dow Jones)- Planet Payment, a multi-currency and data processor, announced Monday that its Pay in Your Currency service, known in the industry as Dynamic Currency Conversion, is now being offered at Dillard's, a fashion apparel and home furnishings retailers in the United States.

The Pay in Your Currency service provides international shoppers paying for their purchases with Visa or MasterCard payment cards with the choice to pay in their home currency at the point of sale, rather than allowing their issuing bank to perform the conversion after the sale has been completed. The service provides greater clarity and certainty to international purchases by allowing the customer to pay in the currency that he or she knows best - their own.  
The service is being offered through Fifth Third Processing Solutions, (Cincinnati, Ohio) Dillard's current credit card acquirer.

(END) Dow Jones Newswires
01-19-09 0327ET
Copyright (c) 2009 Dow Jones & Company, Inc.

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Battle Against Card Fraud Heats Up

In an effort to reduce credit card fraud, HSBC announced it is going to analyze each and every transaction. This will result in both consumer frustration and inconvenience because a higher percentage of legitimate transactions will be declined.  In addition,  further inconveniences include the fact that consumers need to provide travel plans to banks, and banks are recommending the use  of cash and travelers checks  along with credit cards when traveling.   It certainly appears that convenience has taken a back seat to security and our so-called  "cashless society" has been put on hold a while.  This from the BBC over the weekend....

BBC NEWS | Business | Card fraud crackdown accelerated
Card fraud crackdown accelerated - Holiday makers are advised to take several different payment methods

A leading bank is introducing new technology which will mean that every credit card transaction will be scrutinized for fraud.  HSBC is introducing the program, which will affect 10 million card accounts and millions of transactions. The banking industry has warned that more legitimate transactions will be queried or canceled as a result.  Card fraud is rising - up 14% in the first half of 2008 - and fraud abroad now accounts for 40% of all card crime.

Travelers are being advised to take several different payment methods, including cash, credit cards and travellers' cheques when they go abroad. After several years of falling numbers, card fraud started rising again in 2007. Latest figures show that card fraud could have exceeded £600m in 2008, and banks are using increasingly sophisticated systems to try to outwit fraudsters.

HSBC previously checked 25% of card transactions but is currently rolling out a system that means all card transactions will be screened in real time, with a decision made in a fraction of a second.  Bart Patrick of SAS UK, which is providing the software system for HSBC, said: "When you put your card in the machine it's carrying out an automatic check against your pattern of normal use - and making a decision about whether that is real or fraudulent."

He said banks were constantly battling with fraudsters to reduce the levels of crime. "Card fraud is an arms race. The banks will come up with one way of dealing with it, the fraudsters will come up with a way round it."

"What we have seen with chip and pin - it was successful for 18 months, two years - the fraudsters have worked a way round it, so we are now looking at more sophisticated means."

However as the banks become more proactive in targeting fraudsters, more people could find their legitimate transactions are declined or queried.  When Sally Wiber went on holiday to Borneo, she followed industry advice and told her bank where she was going.  (See: Wanna Get Away?)

But her credit and debit cards were blocked when she tried to use them on her first day. "I spent much of the first day trying to deal with my bank and getting internet access, and then had a rather frustrating phone call trying to make sure that I could use my cards for the rest of my holiday," she said.

Continue Reading at BBC   Watch Video at BBC

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Skimmer "Sentenced in Seattle"

Skimmer Now Jail Bird
The owner of a Redmond, WA tobacco shop was sentenced to less than three years in prison for skimming $300,000 off more than 300 credit cards. That's a little harsher than $200 bucks and get outta town" (see Saturday's post) but not as harsh of a sentence as the same crime will see in the future.

Here's the U.S. Attorney's Office news release:

HRANT "MIKE" ASLANYAN, 38, of Redmond, Washington, was sentenced today in U.S. District Court in Seattle to 33 months in prison, five years of supervised release and over $214,000 in restitution for Bank Fraud. ASLANYAN, the owner of a small tobacco and convenience store, pleaded guilty on June 13, 2008, admitting that he skimmed the debit and credit card numbers of more than 300 of his store customers. Those stolen numbers were used to steal money or incur credit from seventeen different banks. At sentencing U.S. District Judge Ricardo S. Martinez said, "This type of crime victimizes totally innocent people who are just going about their daily business." Judge Martinez ordered ASLANYAN taken into custody immediately to begin serving his sentence.

According to the Seattle Times Police Blotter: In late 2004 though early 2006, law enforcement investigated a rash of reports of compromised credit and debit cards. Dozens of people had their credit and debit cards used, without their permission, to withdraw money in the Las Vegas, Nevada and Los Angeles, California areas. Some seventeen financial institutions were hit for about $300,000. Some 300 Redmond area accounts were accessed. (Editor's Note:
Just think how much more he could've made if Bill Gates was a smoker!)

The place where each of the victims had used their credit or debit card, was "Smokers Choice" a small tobacco and convenience store in Redmond. Thirty-five of the victims specifically identified ASLANYAN as the person who had run their credit or debit card. The skimmer that records credit or debit card information was never recovered.

ASLANYAN has refused to assist law enforcement by identifying his co-conspirators who used the information to incur credit charges or raid victim bank accounts.

In asking for 33 months of imprisonment, Assistant United States Attorney Vince Lombardi argued that the victims go beyond the banks that lost money, to the people whose accounts were violated. "It is difficult to overstate the feeling of victimization felt by individuals who find their identity and account information stolen, merely because they chose to entrust Defendant with their debit or credit card when buying cigarettes or other items... Identity theft and related fraud crimes have been an epidemic in this judicial district ... this particular crime impacted hundreds of individuals," Mr. Lombardi wrote in his sentencing memo.

The case was investigated by the U.S. Secret Service, the Redmond Police Department, the Bellevue Police Department, and the Duvall Police Department.


January 17, 2009 at 9:43 AM

$300,000 stolen, yet only $214,000 restitution ... how come not the whole $300,000 ?.. only 33 months in prison?? must have been some pretty heavy plea bargening going on here.. this sleeze should be made to pay back the WHOLE thing and do at least 10 years.. especially since he refused to co-operate with the investigators in naming his partners.. something here has gotta change in our "justice" system...

tsgt - ephrata,WA

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Final Results for Cyber Holiday Pulse Index

The Pulse Index
is an annual tracking of online shopping activity during the holiday season. From November through January, Chase Paymentech monitors the daily activity of 25 of the largest 150 Internet retailers. The data includes the total number of payment transactions and total dollar value processed. The data is taken from transactions crossing Chase Paymentech's global processing platform.

Final Results for Cyber Holiday Pulse Index

"The Pulse Index was remarkable this year," said Mia Shernoff, marketing executive for Chase Paymentech. "Because it tracks actual transactions on a daily basis for such a large number of major e-commerce merchants, the Index provided unique insight into the behavior of online shoppers and how the economic climate affected their buying patterns."

Online Holiday Shopping 2008 - A Mixed Bag

For the 2008 holiday shopping season, the Pulse Index results represent online purchases beginning on November 1, running through December 31. While sales volume and transaction count both show an increase, the average ticket, or amount per sale, declined.

The statistics indicated:

  • Sales volume for the holiday season was up a modest 4.5 percent versus 2007.
  • Transaction count was up a significant 16.5 percent.
  • Average value per transaction was down an unanticipated 10.3 percent.

According to Forrester Research Principal Analyst Sucharita Mulpuru, the mixed e-commerce news highlights the environment faced by retailers this year. "This holiday season challenged all retailers," she said. "Web transaction volume was up significantly from last year, but the relatively lower revenue numbers point to aggressive discounting by retailers and eager deal-hunting by shoppers."

The tough shopping season, however, was an opportunity for some e-commerce merchants. Said Mulpuru, "A few branded retailers with very favorable pricing strategies were able to take advantage of the holiday season's circumstances and increase their market share. There should be a shakeout of Web retailers, but that will leave the remaining players more favorably positioned for growth into 2010 and beyond."

Additional highlights of the 2008 Pulse Index included:

  • The peak shopping season (the period between Thanksgiving and Christmas) sales were down 4.5 percent, but transaction volume was actually up 5.2 percent - this despite five fewer shopping days during this period versus 2007.
  • The largest day for transactions was Tuesday, December 16, with 3.96 million transactions. This was only slightly higher than Wednesday, Dec 17, which saw 3.95 million transactions.
  • The largest day for sales was Tuesday, December 2, with more than $218 million, topping Wednesday, December 17, which saw more than $217 million.

Said Aaron Press, director of market research for Chase Paymentech, "The practical lesson we took from this year's Pulse Index is that all of the hype surrounding Cyber Monday, is just that: hype. Merchants looking to capture additional sales or attract new customers should consider focusing their discounts and promotions on the middle of the week. Tuesday through Thursday is the peak shopping time for online consumers."

Mia Shernoff concluded, "There is a lot of value in being able to see the information and trends reflected in an index representing actual transactions among e-commerce merchants. It helps companies with everything from allocating resources to scheduling promotions during a crucial time."

Data and charts are updated daily, with weekly commentary to explain any trends, offer historical insight and provide context. Guest commentary will be provided by Sucharita Mulpuru from Forrrester and Aaron Press, Director of Market Analysis for Chase Paymentech. Visit the Pulse Index every business day at 2:00 P.M. EST to see the daily numbers, or subscribe to our weekly commentary via RSS. Media inquiries should be directed to James Wester, Director of Corporate Communications for Chase Paymentech at 877.843.5631 

Source: Presss Release

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