Debit-card processor claims data breach part of bigger fraud

Company found evidence of malicious software that compromised card data on its network

Heartland Payment Systems, the Princeton, N.J.-based provider of credit and debit processing, payment and check management services, today disclosed that it has been the victim of a data breach.

Executives said that, after being alerted by Visa and MasterCard of suspicious activity surrounding processed card transactions, the company last week found evidence of malicious software that compromised card data that crossed Heartland's network, .

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"We understand that this incident may be the result of a global cyberfraud operation, and we are cooperating closely with the United States Secret Service and Department of Justice," said Robert H.B. Baldwin Jr., Heartland's president and CFO. Baldwin said about 100 million card transactions per month occur on the affected systems which handle processing for merchants and businesses.

Heartland has set up a Web site to provide information about the data breach, and it advised cardholders to examine their monthly statements and report suspicious activity to their card issuers. Heartland does not believe that its payroll or micropayments operations were affected by the data breach.

Baldwin says the computer forensics examinations conducted by the company have uncovered evidence of multiple instances of malicious software on the Heartland network, although he didn't disclose the exact number of identified instances.

Baldwin apologized for the inconvenience caused by the situation in which customers' card numbers and, in some cases, names, were stolen.

The company is taking steps to improve its network security by adding what it referred to as "a next-generation program designed to flag network anomalies in real time" to better identify possible criminal activity, but it didn't go into details.