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Managing Editor

CardSystems, FTC Reach Data Breach Agreement

Feb 27, 20062 mins
CSO and CISOData and Information Security

CardSystems Solutions, a payment processor that exposed some 40 million credit cards to potential fraud when a hacker exploited a number of its security weakness last year, has reached a settlement agreement with the Federal Trade Commission over the breach, reports via The Register.

CardSystems will have to run independent security audits every other year for the next two decades, reports, and both it and its successor, Solidus Networks—which now does business as Pay By Touch—are required to put a comprehensive infosecurity policy in place, according to

The CardSystems breach became national news last June after it was announced that a hacker had breached the Tucson, Ariz.-based company’s system, exposing some 40 million payment cards of all types to potential fraud, reports.

The FTC alleges that CardSystems stored sensitive information gleaned from the magnetic strips on payment cards without the proper protections, and it did not adequately address computer network vulnerabilities or put in place safeguards to prevent foreseeable attacks, according to

“CardSystems kept information it had no reason to keep and then stored in a way that put consumers’ financial information at risk,” Deborah Platt Majoras said.  “Any company that keeps sensitive consumer information must take steps to ensure that the data is held in a secure manner.”

For related coverage, read McAfee Employee Data Lost by Auditor, When the Dike Breaks: Responding to the Inevitable Data Breach and The Five Most Shocking Things About the ChoicePoint Debacle.

Don’t forget to keep checking in at our CSO Security Feed page for updated news coverage.

Managing Editor

Al Sacco was a journalist, blogger and editor who covers the fast-paced mobile beat for and IDG Enterprise, with a focus on wearable tech, smartphones and tablet PCs. Al managed writers and contributors, covered news, and shared insightful expert analysis of key industry happenings. He also wrote a wide variety of tutorials and how-tos to help readers get the most out of their gadgets, and regularly offered up recommendations on software for a number of mobile platforms. Al resides in Boston and is a passionate reader, traveler, beer lover, film buff and Red Sox fan.

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