CardSystems Appears Before Congress - Security Breach May Drive Them Out of Business
According to the Washington Post, John M. Perry, chief executive of CardSystems Solutions Inc., appeared before the House Financial Services Committee subcommittee last Thursday, to talk about the security breach at his company which exposed information on holders of 40 million credit cards.
He said the company is "facing imminent extinction" and seemed to imply that security breach notification laws were to blame, and that other companies would keep such breaches secret from now on, because of such laws.
"As a result of coming forward, we are being driven out of business," he said.
But wouldn't that argue just as strongly, if not more so, in favor of such laws? What would the alternative? And without such laws, what would be the incentive for companies like his to prevent such breaches in the first place?
In any case, as the article pointed out, the company's existence in not being threatened at the moment by government action or lawsuits, but by the fact that Visa and American Express don't want to do business with them anymore. I believe those companies probably have "security breach notification" provisions written into the contracts of all the companies they do business with now - along with other contractual provisions.
While it is unfortunate that people might be put out of work is CardSystems indeed goes under, I hope he wasn't trolling Capitol Hill for sympathy or attempting the lay the blame for the problem somewhere besides CardSystems.
Rep. Carolyn B. Maloney (Democrat -New York.) is quoted as saying: "The CardSystems incident is a spectacular failure", and "We need to provide the legal structure to fix it."
On the other hand, Rep. Tom Price (Republican-Georgia), is quoted as cautioning against "greater regulation and greater penalties, which is oftentimes the knee-jerk reaction."
A number of national security breach notification bills are pending in Congress. Many have already been enacted in the state legislatures.
He said the company is "facing imminent extinction" and seemed to imply that security breach notification laws were to blame, and that other companies would keep such breaches secret from now on, because of such laws.
"As a result of coming forward, we are being driven out of business," he said.
But wouldn't that argue just as strongly, if not more so, in favor of such laws? What would the alternative? And without such laws, what would be the incentive for companies like his to prevent such breaches in the first place?
In any case, as the article pointed out, the company's existence in not being threatened at the moment by government action or lawsuits, but by the fact that Visa and American Express don't want to do business with them anymore. I believe those companies probably have "security breach notification" provisions written into the contracts of all the companies they do business with now - along with other contractual provisions.
While it is unfortunate that people might be put out of work is CardSystems indeed goes under, I hope he wasn't trolling Capitol Hill for sympathy or attempting the lay the blame for the problem somewhere besides CardSystems.
Rep. Carolyn B. Maloney (Democrat -New York.) is quoted as saying: "The CardSystems incident is a spectacular failure", and "We need to provide the legal structure to fix it."
On the other hand, Rep. Tom Price (Republican-Georgia), is quoted as cautioning against "greater regulation and greater penalties, which is oftentimes the knee-jerk reaction."
A number of national security breach notification bills are pending in Congress. Many have already been enacted in the state legislatures.
posted by - at 8:32 AM
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