Data breach exposes 8000 CBA credit card holders

Penalties considered after Mastercard, Visa investigation.

The Commonwealth Bank has cancelled some 8000 credit cards after it detected a data breach at a merchant.

CommBank noticed fraudulent transactions over its network and alerted card issuers Visa and MasterCard, the breached merchant and its acquiring bank, and affected customers.

The bank did not release the name of the affected merchant and its acquiring bank, or when the breach occurred.

“[CommBank] continuously monitors all credit card transactions to protect our customers from fraud and during this process we became aware of a potential credit card compromise through an Australian merchant acquired by another bank,” a spokesperson said.

“Customer cards are being reissued as a matter of priority.”

Other banks have since reportedly moved to take action.

Mastercard and Visa may issue penalties including fines to the acquiring bank, not CommBank, under the payment industry’s PCI-DSS compliance rules.

The rules impose minimum security standards on merchants according to their size. It demands, among other requirements, that credit card data be encrypted so it could not be read in the event of a data breach.

The severity of the penalties will depend on the merchant’s standard of PCI-DSS compliance at the time of the breach.

The acquiring bank may pass on the penalties to the merchant, but it is common practice in Australia for the banks to absorb the costs.

Australia's Privacy Commissioner is aware of the breach, but did not say if it is investigating the incident.