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Report: Target Hackers Stole Encrypted Bank PINs.


Image: Report: Target Hackers Stole Encrypted Bank PINs

The hackers who attacked Target Corp. and compromised up to 40 million credit cards and debit cards also managed to steal encrypted personal identification numbers, says a senior payments executive familiar with the situation.One major U.S. bank fears the thieves will be able to crack the encryption code and make fraudulent withdrawals from consumer bank accounts, said the executive, who spoke on condition of anonymity because the data breach is still under investigation.

Target spokeswoman Molly Snyder said “no unencrypted PIN data was accessed” and there was no evidence that PIN data had been “compromised.” She confirmed that some “encrypted data” was stolen but declined to say whether that included encrypted PINs.

“We continue to have no reason to believe that PIN data, whether encrypted or unencrypted, was compromised. And we have not been made aware of any such issue in communications with financial institutions to date,” Snyder said by email. “We are very early in an ongoing forensic and criminal investigation.”

The No. 3 U.S. retailer said last week that hackers stole data from as many as 40 million cards used at Target stores during the first three weeks of the holiday shopping season, making it the second-largest data breach in U.S. retail history.

Target has not said how its systems were compromised, though it described the operation as “sophisticated.” The Secret Service and the Justice Department are investigating. Officials with both agencies have declined comment on the investigations.

The attack could end up costing hundreds of millions of dollars, but it is unclear so far who will bear the expense.

While bank customers are typically not liable for losses because of fraudulent activity on their credit and debit cards, JPMorgan Chase & Co and Santander Bank said they have lowered limits on how much cash customers can take out of teller machines and spend at stores.

The unprecedented move has led to complaints from consumer advocates about the inconvenience it caused from the Thanksgiving holiday to the run-up to Christmas. But sorting out account activity after a fraudulent withdrawal could take a lot more time and be worse for customers.

JPMorgan has said it was able to reduce inconvenience by giving customers new debit cards printed quickly at many of its branches, and by keeping branches open for extended hours. A Santander spokeswoman was not available for comment on Tuesday.

Security experts said it is highly unusual for banks to reduce caps on withdrawals, and the move likely reflects worries that PINs have fallen into criminal hands, even if they are encrypted.

“That’s a really extreme measure to take,” said Avivah Litan, a Gartner analyst who specializes in cyber-security and fraud detection. “They definitely found something in the data that showed there was something happening with cash withdrawals.”

While the use of encryption codes may prevent amateur hackers from obtaining the digital keys to customer bank deposits, the concern is that the coding cannot stop the kind of sophisticated cyber-criminal who was able to infiltrate Target for three weeks.Daniel Clemens, CEO of Packet Ninjas, a cyber-security consulting firm, said banks were prudent to lower debit card limits because they will not know for sure whether Target’s PIN encryption was infallible until the investigation is completed.

As an example of potential vulnerabilities in PIN encryption, Clemens said he once worked for a retailer who hired his firm to hack into its network to find security vulnerabilities. He was able to access the closely guarded digital “key” used to unscramble encrypted PINs, which he said surprised his client, who thought the data was secure.

In other cases, hackers can get PINs by using a tool known as a “RAM scraper,” which captures the PINs while they are temporarily stored in memory, Clemens said.

The attack on Target began on Nov. 27, the day before the Thanksgiving holiday, and continued until Dec. 15. Banks that issue debit and credit cards learned about the breach on Dec. 18, and Target publicly disclosed the loss of personal account data on Dec. 19.

On Dec. 21, JPMorgan, the largest U.S. bank, alerted 2 million of its debit cardholders that it was lowering the daily limits on ATM withdrawals to $100 and capping store purchases with their cards at $500.

On Monday, the bank partly eased the limits it had imposed on Saturday, setting them at $250 a day for ATM withdrawals and $1,000 a day for purchases. The usual debit card daily limits are $200 to $500 for cash withdrawals and $500 for purchases, a bank spokeswoman said last week.

On Monday, Santander — a unit of Spain’s Banco Santander — followed suit, lowering the daily limits on cash withdrawals and purchases on Santander and Sovereign branded debit and credit cards of customers who used them at Target when the breach occurred.

Santander did not disclose the new limits, but said it was monitoring the accounts and issuing new cards to customers who were affected.

© 2013 Thomson/Reuters. All rights reserved.

Source: Newsmax.com

Target Offers 10 Percent Off Following Security Breach.


Target is offering a store discount and free credit monitoring after what’s being called the second-largest credit card breach in U.S. history.

The Minneapolis-based discounter says it will offer 10 percent off for people who shop Saturday and Sunday.

Target says it’s heard of “very few” reports of fraud since thieves stole the credit and debit card information of about 40 million shoppers. But the chain is continuing to reach out to customers.

Some potential fraud victims say they’re having trouble getting in touch with Target through its website and call centers. CEO Gregg Steinhafel apologized Friday and says the company is working hard to resolve the issues.

Target hasn’t disclosed exactly how the breach occurred but says it has fixed the problem.

Read more at http://www.philly.com/philly/business/Following_security_breach_Target_offers_10_percent_off.html#YgyDcZ2M4qrB6MbK.99

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Source: Newsmax.com

UK visa applicants to pay in US dollars the sign of Zoological republic coming to end.


 

British-flag

The British High Commission in Nigeria on Wednesday announced a new visa regime application whereby applicants for United Kingdom visa would be paying online in U.S. dollars.

In a statement signed by its Press and Public Affairs Officer, Mr. Rob Fitzpatrick, the commission said that the new system would begin on December 16.

“From December 16 2013 all applications for a UK visa must be completed using our online application system and paid for online in US dollars. Payment can be made using Verve debit card, Visa or MasterCard credit or debit cards or the e-wallet PAGA.

 

“The move to online application and payments will deliver a streamlined application process and is consistent with a wider global trend to online transactions and payments.

“It meets the requirements of the UK Government‘s Digital by Default initiative and will help cut costs in the management of the visas operation, which in turn helps to keep visa fees down,” it added.

Source: Radio Biafra.

Man charged in barista death linked to 7 killings.


 

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ANCHORAGE, Alaska (AP) — A man charged in the death of anAlaska barista was found dead in his jail cell Sunday, andauthorities announced hours later that investigators have linked him in recent months to seven other possible slayings in three other states.

Israel Keyes died of an apparent suicide, U.S. Attorney Karen Loeffler said at a hastily assembled news conference that also included the FBI and Anchorage police

Keyes was facing a March trial in Anchorage federal court for the murder of 18-year-old Samantha Koenig, who was abducted from a coffee kiosk in the city last February. He was later arrested inTexas after using the victim’s debit card.

Keyes confessed to killing Koenig, as well as killing Bill and Lorraine Currier of Essex, Vt., Anchorage police chief Mark Mew told reporters.

The bodies of the Curriers have never been found. They were last seen leaving their jobs on June 8, 2011. Co-workers reported them missing the next day.

Keyes, 34, also indicated he killed four others in Washington state and one person in New York state, but didn’t give the victims’ names, authorities said.

The FBI contends Keyes killed Koenig less than a day after she was kidnapped. Her body was recovered April 2 from an ice-covered lake north of Anchorage.

Koenig’s disappearance gripped the city for weeks.

A surveillance camera showed an apparently armed man in a hooded sweat shirt leading Koenig away from the coffee stand. Koenig’s friends and relatives established a reward fund and plastered the city with fliers with her photo in hopes of finding the young woman alive.

Prosecutors said Keyes stole the debit card from a vehicle she shared that was parked near her home, obtained the personal identification number and scratched the number into the card.

After killing Koenig, Keyes used her phone to send text messages to conceal the abduction, according to prosecutors. He flew to Texas and returned Feb. 17 to Anchorage, where he sent another text message demanding ransom and directing it to the account connected to the stolen debit card, according to prosecutors.

Keyes made withdrawals from automated teller machines in Alaska, Arizona, New Mexico and Texas before his arrest in Texas, according to prosecutors. He was charged with kidnapping resulting in Koenig’s death.

Koenig’s family said there was no apparent previous connection between the teen and the suspect. Reached by phone Sunday, Koenig’s father, James Koenig declined to comment on Keyes’ death.

In Vermont, the U.S. Attorney’s Office said in a statement Sunday that they have been working with investigators in Alaska since April on the Currier case.

Investigators have determined that the couple’s home was entered forcibly, and that there was evidence of a possible struggle.

Their car was stolen and was recovered several days after their disappearance at an apartment complex about three-quarters of a mile away from their home.

Marilyn Chates, Bill Currier’s mother, told The Associated Press that police contacted her some time ago to tell her about Keyes’ confession and to tell her that they believed the couple’s killing was random.

Certificates of presumed death were issued over the summer and a memorial service was held in late summer, she said.

Vermont authorities called Chates Sunday to tell her of Keyes’ suicide.

“After some thinking, our family has been saved the long road ahead — trials, possible plea agreements and possible appeals — and perhaps this was the best thing that could have happened,” she said from her home in Florida Sunday evening.

Keyes was thorough and methodical in disposing victims, authorities said Sunday. Only Koenig’s body has been recovered.

He didn’t have a clear pattern in victims, who ranged widely in age, authorities said. Money appeared to be just a partial motive.

Authorities say they may never know the full extent of Keyes’ crimes because he parsed out only a little information at a time, withholding names and locations of most of his victims.

There may be victims in other states, besides the four states noted by Keyes, FBI Special Agent in Charge Mary Rook said.

Keyes also confessed to bank robberies in New York state and Texas.

Authorities wouldn’t say how Keyes killed himself, only that he was alone in his cell. An autopsy will be conducted.

Keyes could have faced the death penalty in the Koenig case.

___

Associated Press writer Rebecca Miller contributed to this report.

Source: YAHOO NEWS.

By RACHEL D’ORO | Associated Press

U.S. tax refund card program flawed: report.


WASHINGTON (Reuters) – A short-lived U.S. government program meant to get tax refunds to low-income taxpayers using debit cards was flawed, according to a report released on Wednesday.

The program ran for less than a year before it was suspended by the Treasury Department after few people participated.

The analysis by the Urban Institute said about 800,000 people were selected for inclusion in the program. But many invitations to take part in it were sent to the wrong addresses.

The $4.95 monthly maintenance fee for the program might have further depressed participation in the program, the report said.

About 0.3 percent of people who received the invitations applied for the card, according to the report.

Treasury suspended the program in late 2011.

(Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Stacey Joyce)

Source: YAHOO NEWS.

Reuters

Visa, MasterCard, banks in $7.25 billion retail settlement.


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By Jessica Dye

NEW YORK (Reuters) – Visa Inc, MasterCard Inc and banks that issue their credit cards have agreed to a $7.25 billion settlement with U.S. retailers in a lawsuit over the fixing of credit and debit card fees in what could be the largest antitrust settlement in U.S. history.

The settlement, if approved by a judge, would resolve dozens of lawsuits filed by retailers in 2005. The card companies and banks would also allow stores to start charging customers extra for using certain credit cards in an effort to steer them toward cheaper forms of payment.

The settlement papers were filed on Friday in Brooklyn federal court.

Swipe fees – charges to cover processing credit and debit payments – are set by the card companies and deducted from the transaction by the banks that issue the cards, essentially passing on the cost to merchants, the lawsuits said.

The proposed settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country’s largest banks who issue the companies’ cards. The card companies have also agreed to reduce swipe fees by the equivalent of 10 basis points for eight months for a total consideration to stores valued at about $1.2 billion, according to lawyers for the plaintiffs.

The deal calls for merchants to be allowed to negotiate collectively over the swipe fees, also known as interchange fees.

Merchants would also be required to disclose information about card fees to customers, and credit card surcharges would be subject to a cap, according to the settlement papers. Surcharge rules would not affect the 10 states that currently prohibit that practice, which include California, New York and Texas.

An additional $525 million will be paid to stores suing individually, according to the documents.

“This is an historic settlement,” said Bonny Sweeney, a lawyer for the plaintiffs. The settlement “will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers,” said Craig Wildfang, who also represented the plaintiffs.

Noah Hanft, general counsel for MasterCard, said the company believed its interests were “best served by an amicable resolution” of the case. Visa Chief Executive Officer Joseph Saunders said the settlement was in the best interest of all parties and did not expect the settlement to impact its current guidance.

Not everyone was pleased with the proposed settlement, however. One class plaintiff, the National Association of Convenience Stores, rejected the settlement in a statement on Friday from its president, Tom Robinson, who is also president of Robinson Oil Corp.

“Not only does the proposed settlement fail to introduce competition and transparency, it actually provides Visa and MasterCard with the tools to continue to shield swipe fees from market forces,” Robinson said.

The proposed considerations are a far cry from the $50 billion in swipe-fees paid each year by U.S. retailers, he said.

The American Bankers Association, a trade group whose members include the bank defendants, said retailers, not consumers, stood to gain the most from the proposed settlement.

“Big-box retailers will likely seize this opportunity to ask Congress for even more handouts,” said ABA President Frank Keating in a statement, referring to the Durbin amendment passed by Congress in 2010 limiting debit-card swipe fees – a move that banks say resulted in an $8 billion windfall for retailers.

“The legal process worked and should send a signal to Congress that it is wrong to pick winners and losers in a complex dispute between two industries,” the Electronic Payment Coalition, which represents payment networks, said in a statement.

The plaintiffs charged that Visa and MasterCard colluded directly and indirectly through the issuing banks to keep merchants from finding ways to mitigate credit-card costs.

Plaintiffs in the case include supermarket chain Kroger Co, pharmacy chain Rite-Aid Corp and shoe retailer Payless ShoeSource, as well as trade associations such as the National Association of Convenience Stores, National Grocers Association and the American Booksellers Association.

The National Retail Federation, a trade group representing retailers, said that “the test will be whether the injunctive relief is meaningful. Unless it is, the card market will stay broken and neither merchants nor their customers will achieve a long-term benefit.”

A number of banks that issue Visa and MasterCard cards, including JP Morgan Chase & Co, were also named as defendants in the lawsuit, along with Visa and MasterCard’s payment networks.

A spokeswoman for Bank of America NA said it believed the terms of the settlement were fair. JP Morgan declined to comment. Citigroup Inc acknowledged its role in the deal and declined further comment.

A spokesman for Wells Fargo said the company was pleased to put the matter behind it.

An estimated 7 million retailers will be affected by the settlement, according to lawyers for the plaintiffs.

Visa and MasterCard have been plagued by legal problems over their payment-card policies for the last decade. In 2003, the companies paid a combined $3 billion to settle a lawsuit by stores over their “honor all cards” policies, which tied acceptance of credit to debit cards.

The U.S. Department of Justice brought and settled a civil antitrust suit against Visa and MasterCard in 2010. As part of the consent decree, the companies agreed to drop certain policies that kept stores from steering their customers to cheaper forms of payment.

But the decree left intact policies that prohibit stores from charging customers more when they use certain payment cards, according to a July 2011 court filing from plaintiffs.

The defendants denied that any collusion took place.

Visa said its share of the settlement is $4.4 billion, and Mastercard said its share is $790 million.

In December, Visa announced it set aside an additional $1.57 billion to cover the cost of a potential settlement in the case, bringing its litigation reserve balance to $4.28 billion, according to a regulatory filing. MasterCard in the fourth quarter of 2011 recorded a $770 million pretax charge, as an estimate of its potential liability in the case, a filing with the U.S. Securities and Exchange Commission showed.

MasterCard said in a statement that it expected to incur an additional $20 million pre-tax charge in its 2012 second quarter financial statements to cover its portion of the settlement.

Visa and MasterCard together accounted for more than 80 percent of U.S. credit and debit card purchases by volume in 2011, according to data from the Nilson Report, a California trade publication.

Albert Foer, president of think-tank the American Antitrust Institute, said that the settlement should create more transparency for consumers at the cash register. Because merchants had been forbidden from charging customers extra for costlier payment forms, they often built that cost into the retail price, he said.

While it may not lead to lower prices, “it gives the consumers some choice and it should ultimately mean a better deal for everybody,” Foer said. “In the longer run, it should help keep retail prices under better control.”

It may also be the last time retailers are allowed to take Visa and Mastercard to court over interchange fees. The proposal provides for extensive litigation releases that would keep stores that join the settlement from suing over a wide range of issues relating to fees and anti-steering restraints.

The case is In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, in the U.S. District Court for the Eastern District of New York, no. 05-1720.

(Reporting by Jessica Dye; editing by Bernard Orr, Andre Grenon and Carol Bishopric)

Source: YAHOO NEWS.

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