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SECU probes fraud cases after security breach

Posted January 28, 2009

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— Officials with the State Employees Credit Union are investigating 40 cases of fraud in the wake of a security breach at a company that processes credit card payments nationwide.

Criminals installed spying software on the computer system of Heartland Payment Systems, a national Visa processor for over 250,000 merchants that include hotels, restaurants and retailers. The company said recently it had closed the hole in its security system.

SECU receives card transactions through Visa, which receives the transactions from Heartland. The credit union has issued new credit cards and personal identification numbers to its 62,000 cardholders as a precaution.

"We want to take what will be the most costly approach but the most proactive approach and close those cards as quickly as we can," said Leanne Phelps, SECU senior vice president.

The fixes came too late for Fred Yancey, who recently found that his SECU checking account has been drained through an unauthorized transaction.

"(My balance was $19.09. That told me some activity that happened," Yancey said.

The $547.50 transaction was from Points.com, a Web site for redeeming rewards points from airlines and retailers.

"I had no idea what it was," he said, adding that he immediately called to cancel his card and fill out a fraud report.

Phelps said Yancey's situation is one of dozens of cases of suspected fraud that are under review. The SECU will credit his account for the missing money, she said.

Financial institutions aren't required to notify customers about the Heartland breach, she said, but the SECU chose to do so to alert their customers about the potential for fraud.

Yancey said he was thankful for the notice, noting that it prompted him to check his account and catch the discrepancy quickly. He suggested other SECU members check their account balances.

"Check your account daily. Know what's supposed to be there. If it doesn't look right, don't hesitate to call," he said.


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  • johnfranks999 Jan 29, 2009

    Price Waterhouse Cooper and Carnegie-Mellon’s CyLab have surveys showing the senior executive class to be lacking regarding IT risk and its tie to overall business risk. As CIO, I pass along things that work, hoping good ideas make their way back to me. Breaches are due to a lagging business culture. Check your local library: A book that is required reading is "I.T. WARS: Managing the Business-Technology Weave in the New Millennium."
    The author has an interview that is a great exposure: http://businessforum.com/DScott_02.html -
    The book was a tip from an intern – it’s an MBA text at University of Wisconsin. Systems of security are important, but no system can overcome laxity, ignorance, or deliberate intent to harm. Necessary is a sustained culture and awareness; an efficient prism through which every activity is viewed from a security perspective prior to action.
    In the realm of risk, unmanaged possibilities become probabilities – read the book BEFORE you suffer a

  • uknowsomuch Jan 29, 2009

    As a longtime member of the credit union, I could not be more pleased with the level of service I have always received. I have been with Wachovia, First Union, and BB&T. I will never stray from the SECU.

  • voice your opinion Jan 29, 2009

    I've worked in the banking industry for 21 years. Here are a few things to think about:
    1) Sign up for on-line banking and check your accounts everyday--this includes checking, savings, cd's, & credit cards.
    2) When there is a breach in a computer system, the bank will automatically block/close your debit card. Yes this may be a little embarassing when you need to use it but, trust me, you don't want to have to deal with the hassle if you have fraud on your account. With fraud, you may have to close your account and then think about the hassle to change all your direct deposits and auto drafts :( When the bank blocks your debit card, they are trying to protect you and them.
    3) To protect yourself from fraud, do not give anyone your PIN number (an obvious observation but you'd be surprised how many people have fraud committed by them from their own family). Keep your PIN number safe.

  • kitelover110 Jan 29, 2009

    I hoope that I do not have to have a new card and PIN. With CRS and CRAFT, I just would not be able to remember another PIN.

  • SunnyDays Jan 28, 2009

    I got my letter on Saturday, I immediately checked my account, actually like I do each night. Fortunately to date nothing has happened.......however this is one reason why I have been with SECU since 1982.

    They are great.

  • thebull271 Jan 28, 2009

    I am GREATLY appreciative of SECU.. I got a letter in the mail about the breach. They are sending me a new check card. Cant beat the bank GREAT customer service

  • jse830fcnawa030klgmvnnaw+ Jan 28, 2009

    At least SECU is being proactive by closing the tainted accounts and issuing new cards. Heartland could careless...

    Info on the security breach:

    If you think you may be an identity theft victim due to this breach, see information from the NC Department of Justice:

  • prissygirl Jan 28, 2009

    Had the same issue with Fidelity! Like you, I never received anything! It was embarrassing!

  • nerdlywehunt Jan 28, 2009

    We had similar "service" problems with Fidelity. When I went in to roll over all of my 401k money to the Credit Union they cried the blues but I fired them anyway. The credit Union has been great in every respect.

  • Newshound Jan 28, 2009

    i think something similar happened to fidelity card numbers except i didnt receive a letter saying my card # was blocked I found out when i went to buy a few new clothes when the teller informed me there was a block on my debit card number. I stood there arguing with them and even called the automated number to prove i had way more money in there than the $80 i was trying to spend. I was humiliated. They responded with "You should have gotten a written notice in the mail a few days ago"