July 7, 2005

Pennsylvania Credit Union Replacing Cards Regardless of Fraud

In the past two weeks, the nation's financial institutions have been scrambling to cope with the latest in a string of security breaches. They have flagged the most exposed card accounts and scoured records for unusual transactions that could be traced to criminal activity. They also have started playing the odds, by trying to determine whether it would be cheaper to eat the costs from fraudulent charges than it will be to incur the big expense of issuing new cards -- which can cost as much as $20 each -- and alerting customers to the potential threat. So far, most have decided to wait for the exposed accounts to fall into criminal hands. That isn't the case for the Pennsylvania credit union that serves some 300,000 state workers, teachers and students. Rather than waiting to see if fraudsters had grabbed hold of its card data, PSECU has decided to close accounts and reissue 7,300 cards flagged
by Visa as among the most vulnerable.

This Credit Union Doesn't Wait To Replace Exposed Cards, Wall Street Journal, July 1, 2005.