Heartland Payment Systems has announced that the major data breach it revealed to the public in January has so far cost it over $12 million. It blamed the expense for its 1^st quarter losses. A large percentage of the cost is due to a hefty fine levied against it by MasterCard. CEO Robert Carr said the company plans to appeal the fine:

          Carr added that Heartland plans to appeal the fine. MasterCard claimed that the processor had failed to respond appropriately after it was notified of a potential breach. But Heartland believes that it did respond properly and that “upon discovering the intrusion, it took immediate and extraordinary action to address the intrusion,” Carr said. In a statement to Computerworld, MasterCard said that it “believes the fines it imposed were warranted and consistent with its rules.”

On January 20th, the company, which is the largest payment processor in the country with over a quarter million customers, announced that unknown intruders had broken into its computer systems and that, as a result, data on as many as 100 million credit and debit cards was compromised. The actual breach allegedly occurred last May but was not discovered until January despite warnings by credit card companies of suspicious activity related to the transactions it processed.

My bank was one of Heartland’s customers and as a result my debit card was replaced. It was a huge hassle having to change the payment information I had on file with sites like Amazon and companies I have accounts with such as my cell phone provider. I can only imagine the hassle caused by having to cancel and reissue hundreds of thousands of debit and credit cards. I believe the fine was well deserved because the company was warned of suspicious activity by the credit card companies and apparently ignored them until the breach was discovered in January. Its security policies obvious left much to be desired!