Credit Card Breaches: A How-To Guide
For most retailers credit cards are the primary form of the payments that they receive. Accepting credit cards, however, carries significant data security risks and potential legal liability. In addition to the normal repercussions of a data security breach – e.g., reputation damage, the risk of class action litigation, and the risk of a regulatory investigation – if a retailer’s credit card system is compromised the retailer may be contractually liable to its payment processor, its merchant bank, and ultimately the payment card brands (e.g., VISA, MasterCard, Discover, and American Express). In many cases that contractual liability surpasses any other financial obligation that arises from the breach. The following provides a snapshot of information concerning credit card breaches.