Hackers Outsmart Heartland
January 26th, 2009
Professional hackers broke into retailer TJX’s system in 2007 and stole nearly 100 million customer records. Now, another group of professionals has struck again and put thousands of additional consumers at risk for identity theft or credit card fraud.
Heartland Payment Systems, one of the country’s largest credit card processors, recently announced a security breach that may end up putting the TJX fiasco to shame. Heartland processes more than 100 million transactions per month for approximately 175,000 merchants, and it appears its system may have been breached for several months before the company was tipped off by Visa and Mastercard due to suspicious transactions. Heartland President, Robert Baldwin, actually used the words “longer than weeks” when describing the length of the security breach in an interview with USA TODAY. Longer than weeks?
It sounds like he really meant to say “months” to me. Keep in mind that this is a company that has received awards for technological excellence in the industry and prides itself in the security of its systems. Unfortunately, this just proves that fact that no business is capable of outsmarting all the professional hackers out there. You can try really hard to follow all the rules, but the risk will always be there. Nothing is 100 percent secure.
Of course, Heartland has yet to announce how many people could potentially be affected by the breach. If you used credit cards at any one of the 175,000 restaurants, retail stores, and hotels around the country that utilize Heartland’s payment processing system, it could be you. So, keep a close eye on your credit reports during the next several months and expect a notification from Heartland Payment Systems if your personal information was possibly stolen.
Posted By: Joshua Heckathorn | Comments (0)Will Credit Card Reform Make it on Obama’s Long To-Do List?
January 20th, 2009
Update: On May 22nd 2009, President Obama signed the Credit CARD Act of 2009 into law, which includes a Credit Cardholders’ Bill of Rights.
We truly experienced a historic moment this afternoon as Barack Obama was sworn in as the 44th President of the United States and the first African-American to hold our country’s highest elected office.
His sobering speech about where America stands and where it can be in the future had a much different tone than many he delivered during the campaign. I could practically feel the weight of the world upon his shoulders, and certainly see it in his face as he emerged from the Capitol to the cheers of nearly two million people gathered on the National Mall. Yes, it’s clear he means business, but real change will take time. And one man can only do so much. So, where will the Obama administration begin?
If campaign promises are any indication of what Obama will tackle in the years to come, many believe he will quickly usher in a new era of consumer protectionism and sweeping reform of credit cards. And while I believe these are extremely important issues that need to be addressed, I’m not convinced we will see results as quickly as many consumer advocates are expecting.
In fact, I think one of Obama’s most challenging tasks will be managing the expectations of what he can truly accomplish in the face of all that has been left on his plate. A long and brutal war in Iraq and Afghanistan, an economy that has investors and consumers scared out of their wits, and a collapsing financial system are all challenges that will take a massive amount of time and resources to overcome. His victory speech in November gave us a glimpse of his first efforts to manage expectations when he said, “We may not get there in one year or even one term.” However, he has made it clear that the economy will take first priority.
So, while a “credit card bill of rights” and a universal credit card rating system would be nice to have by 2012, I’m not so sure these items from Obama’s platform will receive as much attention as we would like. Only time will tell.
Posted By: Joshua Heckathorn | Comments (1)Cavalli’s Cure for the Credit Crunch
January 9th, 2009
A name I don’t see too often in articles about credit and debt caught my eye today while skimming through RSS feeds. Roberto Cavalli, the world-renowned designer and master of animal prints, recently announced he has taken his mission to “create a planet” around the Cavalli brand to a whole new level.
Of course, the mission of any successful designer doesn’t stop at just getting his clothes on your back. It’s really about creating a lifestyle that includes the brand in all facets of one’s life. So, at a time when even high-end luxury retail is feeling the hurt, Cavalli now wants to be in your wallet too. The “Cavalli Card” is set to launch at a special event on March 1st in conjunction with the Milan Fashion Week.
If your favorite recurring dream includes carrying iridescent credit cards with snakeskin prints into a Cavalli boutique to purchase a $1,600 dress with about as much fabric as a bikini, then your moment to shine has finally arrived. Vogue reports that exclusive benefits will include “dedicated VIP services at Cavalli boutiques and access to special sales, events and shows, plus exclusive beauty, hospitality and travel offers.”
I have yet to see any mention of interest rates or other terms and conditions, but I expect they won’t be anything too special. Cavalli has teamed up with Corpcom and Mastercard to launch the credit card, and apparently it will only be available online at robertocavalli.com and in Cavalli boutiques around the world. Sorry Creditnetters, but you likely won’t be able to find it here on creditnet.com.
Posted By: Joshua Heckathorn | Comments (0)2009 Brings a New FICO Score
January 2nd, 2009Not only has the credit crunch made it more difficult to obtain practically all types of credit, but Fair Isaac, developer of the well-known FICO score, has also announced the biggest change to their credit scoring model since 1989. So, prepare yourself now, because it will be more important than ever in 2009 to understand how everyday financial decisions will affect your credit score.
Who is Using New FICO
Equifax and TransUnion are on track to implement the new FICO scoring model by late spring. Of course, it’s too early to tell how many lenders will start using the new model right away. It could be several months or even 2010 before many make the switch.
It’s also too early to really understand how it will affect the average consumer, but Fair Isaac has estimated that 40% to 50% of borrowers’ credit scores could go up or down by 20 points. Here’s a brief list I compiled of the three major changes that may help or hurt you.
- Piggybacking will live on, but it will become a longer and harder path to establishing credit
- A single late payment will not be as damaging as it was in the past. The new model will look at how often borrowers are late with payments and categorize them into 12 different groups
- Amount of balances carried will be more important than how many accounts a borrower has open. Those trying to repair debt and who owe money month to month will be much harder hit
Twenty points can be the difference between getting approved or denied for a personal or home loan in this lending market, so keep a close eye on how these changes affect your credit score in the coming months.
Have you seen any changes to your credit score already? If so, post a reply below and let us know.
Posted By: Joshua Heckathorn | Comments (3)
