When Western Union Holdings' Web site was hacked last September, the result was any company's worst nightmare: The intruders stole close to 16,000 credit card numbers belonging to customers who had used WesternUnion.com to make online money transfers. The company had to contact every one of those people to let them know about the breach.
"No fraudulent transactions were consummated, which was our No. 1 priority," says Western Union spokesman Pete Ziverts. Luckily, customers' Social Security numbers were not kept on the server with the credit card data. Just a week after the break-in, customer levels had rebounded. "People could see that we handled the situation responsibly," Ziverts says. Still, plans for the site's full-scale launch have been pushed back. He says, "It becomes difficult to go through an experience like this and say, 'Hey, WesternUnion.com is here.' "
| They’re Out to Get You |
| No, you're not just paranoid. But it might surprise you that outside forces aren't the only ones that threaten your business. According to the latest CSI/FBI computer crime survey, company insiders are the culprits 71 percent of the time. |
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While the threat of online credit card fraud to individual consumers is real, e-shoppers have less at stake than the commerce sites do. That's because consumers have protection (in the form of limited liability) and a course of action, says Jonathan Rusch, special counsel for fraud prevention at the U.S. Department of Justice. "It's the online merchant who is more likely to get burned," Rusch says
| What’s the Damage? |
| Federal law protects credit card users against fraud online and off. Under the Fair Credit Billing Act, consumers are liable only for US$50 worth of unauthorised charges. For ATM cards, a cardholder's liability is $50 if the card is reported lost within 48 hours, and as much as $500 if reported thereafter. In most instances, credit card companies will waive the $50 fee. To make consumers more comfortable shopping online, Visa USA, MasterCard International, and American Express have introduced zero-liability programs that waive all consumer liability in case of online fraud. |
