By Andy McCue
Tuesday, May 02 2006 12:40 PM
URL: http://www.zdnetasia.com/news/security/0,39044215,39356122,00.htm

A U.K.-based online retailer has been identified as the source of a security breach that has resulted in thousands of MasterCard and Visa holders having their credit cards cancelled last week.

At least 4,000 U.K. MasterCard holders are believed to have now been affected by the breach which occurred after hackers gained access to credit card details via the as-yet-unnamed e-tailer.

It was initially believed 2,000 credit card details had been stolen after silicon.com exclusively reported that MasterCard advised card issuers to shut down the accounts of the cardholders affected and issue new cards after discovering the breach.

But a MasterCard holder whose card was stopped as a result of the security breach told Silicon.com that his card issuer, Goldfish, part of Morgan Stanley, said more than 4,000 people have been affected.

The Clydesdale Bank and Morgan Stanley itself are two other MasterCard card issuers that have been proactively calling customers whose details have been compromised by the breach over the past week.

MasterCard said it is unable to name the retailer or release any more details about the incident because of the sensitivities of the ongoing investigation but stressed that MasterCard's own systems were not breached.

A statement issued by the company said: "MasterCard International is aware of a potential security breach at a U.K.-based retailer. But because this is an ongoing investigation, we cannot disclose specific details regarding the incident or comment, other than to say that we are co-operating and we have notified the banks that issue MasterCard cards to monitor for any suspicious account activity and take the necessary steps to protect cardholders."

Visa also said it notified the issuing banks of the affected cardholders as soon as the security breach was discovered.

A spokesman for Visa Europe said: "Visa Europe can confirm that it is aware of a suspected data compromise involving a U.K.-based online merchant. A full investigation is continuing and Visa is working closely with all appropriate organizations to resolve this issue as a matter of urgency."

Andy McCue of Silicon.com reported from London.