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Tuesday, January 03, 2012

Banks and credit card companies shut 18,000 accounts

Israeli banks and credit card companies report that there were not 400,000 accounts hacked by a group of Saudis, but some 18,000 accounts were 'compromised' and have been shut down.
Israeli credit card companies Isracard and Visa CAL both tried to reassure their customers, saying that only 14-18,000 card have actually been compromised and that the situation has been contained in full.

Both companies are said to be making every effort to contact card holders in order to replace their cards.

"We blocked all of the cards whose numbers were on the list to online use. They can still be used for regular purchases," Isracard CEO Dov Kotler told Ynet.

Isracard, he added, will replace about 6,600 credit cards: "First of all, we have to keep this proportionate. We have to differentiate between threats made by Saudi hackers and the facts. We've been working through the night and we discovered that contrary to reports, between all the credit card companies in Israel only 14,000 accounts or so have been compromised.

"That's about 0.2% of all active accounts in Israel. We will, of course, compensate customers who were compromised – as we routinely do. I'm responsible for my customers. Anyone who suffered damage will be compensated. There is nothing to worry about," Kotler said.

Visa CAL CEO Israel David told Ynet less that 3,000 CAL accounts were compromised: "We know which customers were compromised and we've blocked their cards for online or phone purchases. They can still use the cards for regular purchases and as ATM cards."

David too stressed that Visa CAL customers "have nothing to worry about. There is no reason to panic. The customers are in no danger." CAL, he added, will issue new cards to the clients compromised.

Gilad Katz, CEO of Leumi Card, confirmed that 4,000 accounts have been compromised: "We will be replacing all of the compromised credit cards and no one will suffer any damage. We've restricted the cards' online activity. The public doesn’t have to do anything – we are doing all the work."

It is still unclear how the information was compromised. "There's no question that website security in Israel has to improve," Kotler said. "The newer websites pose less of a problem, because their security protocols are higher – it's the older websites that have outdated security."
The government needs to be a lot more careful about how it uses our personal information as well. You will recall that not long ago I reported that the entire population registry (including names, addresses and identification numbers) had been leaked online. As far as I can tell, the government never did anything about it.

Israel is the leader in online security. But the shoemaker's kids once again have no shoes. What could go wrong?

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