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Heartland Taking Names And Kicking POS, With Visa’s Help
Indeed, Heartland has been almost robotic in its consistency that it has had no clue how much data—if any—has been captured. A spokesperson for Cloakware—Katy Zack—defended the reference, saying that Heartland has said that it handles 100 million transactions a month and that it has been breached. Therefore, a very generous definition of compromised would include any piece of data inside any entity whose security has been penetrated. To be precise, Zack pointed to a USA Today story and said that Heartland was quoted as describing “hundreds of millions of transactions,” but the story merely said 100 million. No matter. “In Cloakware’s press release, we inferred that it was put in the public domain via an interview with the company’s president and CFO,” Zack wrote. “We just said that these transactions were compromised, not stolen.”
That’s a very fine line, but vendors going for informational stretches is nothing unusual. What was unusual was what happened next. Asked to verify that they hadn’t changed their tune, Heartland spokesman Jason Maloni assured us that they hadn’t. Later that evening, PRNewswire issues the following notice: “In the news release, Top Five Pitfalls Identified for Securing Retail Cardholder Data, issued March 19, 2009 by Cloakware Inc. over PR Newswire, we are advised by the company that the ninth paragraph in the original release should be disregarded.” Yep, that disappearing graf was the one referencing Heartland, the exact paragraph Cloakware had just defended.
There is something delightfully refreshing about how Heartland is handling this breach. Consistency, openness and an insistence on the truth? I could so very easily get used to that.
To be fair, Heartland hasn’t been perfect and there are still many holes in its public tale. At this late stage, it begs credulity for them to still say they have no rough idea of how many pieces of data have been grabbed. But there’s still something nice about waiting to have relatively solid details before making a statement.
-Marc
March 25th, 2009 at 7:04 am
Evan;
I certainly don’t approve of advertising using Heartland’s unfortunate position but you, or rather Heartland’s competitors, raise an interesting point.
Merchants are required to be compliant. Being compliant requires using a compliant processor. Heartland is not, at least for now, compliant. Therefore Heartland’s merchants are not compliant.
Yes? No?
March 25th, 2009 at 7:28 am
Editor’s Note: The gray area here is Visa’s use of the word “probation” and Visa’s definition. It means that someone is off the PCI Compliant list, but it also means explicitly that retailers and still use them and be considered compliant. That probationed entity has to jump through a lot of testing hoops–and is put on notice that they need to fix everything quickly or they’re out–but they are still qualified to accept transactions.
But regardless of how anyone might feel about this probation mode, Visa is within its rights to create it and to define it however it wants. Given that Visa–from the beginning–was explicit about what it meant, I have to side with Heartland on this one and say that the rivals (this time) were out-of-line. I don’t have to agree with Visa’s move (personally, I would have argued that if they wanted to have an impact, they should have cleanly removed them from the list. That would have sent a clear signal) to respect it and to argue that the industry has an obligation to abide by it.
March 31st, 2009 at 12:25 pm
Considering all of the close scrutiny Heartland has now been subject to by VISA personnel, FBI, Secret Service, and Heartland’s own staff and security consultants, their systems are now probably far more secure than most. So why on Earth did Visa decide to make a public spectacle of “suspending” Heartland? What benefit could possibly been achieved by doing that? Either VISA considers Heartland’s systems secure enough to be safe for processing transactions, or not. If they are not secure enough then they should have been REMOVED from the list, not “placed on probation”.
April 22nd, 2009 at 7:15 pm
A VISA represenative speaking at the ETA show clarified this today. The merchant is responsible from his network and down stream — meaning any POS, hardware or software that they host. Merchants must use “approved” gateways and processors but if the breach happens up stream — meaning the gateway or processor — then the merchant is not liable. Heartland is still an “approved” vendor (albeit on probation) so compliant merchants using Heartland are compliant.