Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Cybersecurity
    • Cybersecurity

    Visa Sued for Fines Stemming from Genesco Data Breach

    By
    Robert Lemos
    -
    March 14, 2013
    Share
    Facebook
    Twitter
    Linkedin

      Specialty sports-apparel retailer Genesco filed a lawsuit on March 7 against Visa seeking to recover nearly $13.3 million in fines that the credit-card company levied following a breach of the retailer’s systems that may have resulted in fraudulent transactions.

      The civil case could be the most significant test to date of the Payment Card Industry’s Data Security Standards (PCI DSS), which forces merchants that handle credit-card data to follow certain security practices or face fines from the credit-card industry, said Torsten George, vice president for risk-management firm Agiliance. The lawsuit argues that Visa is not allowed to require other companies to pay penalties citing Visa’s own operating regulations and California law. The lawsuit also alleges that Genesco was never out of compliance with PCI DSS regulations, and so it should not have been fined.

      “This is one of the first cases making it into the public where the merchant is saying, ‘I’m sick and tired of being put into a position where I basically have no choices and I’m sick and tired of being a slave of the system,'” he told eWEEK. “Merchants want to try to get more objective treatment from the credit-card companies.”

      The lawsuit, first reported by Wired.com, is the first time a merchant has sued a credit-card company for fines levied under PCI DSS. The legal action stems from a 2010 compromise at Genesco, about which the company provided only limited details in the court document. The attackers installed a packet sniffer on the company’s network that siphoned off card data sent from Genesco to its banks. The attackers apparently did not target the company’s stored card data.

      While companies complain about the cost of complying with PCI DSS, the specifications do result in better security, especially if companies treat them as guidelines to be exceeded, rather than onerous tasks to check off. In a 2010 analysis, Verizon found the companies who suffered a breach were far less likely to have complied with PCI DSS. Yet, others have argued that the rules do not result in better security, because companies that should have been PCI-compliant but were not have still suffered notable breaches.

      In June 2011, Visa fined both banks $5,000 in noncompliance fees, Genesco stated in its lawsuit. Both banks appealed the fines, but to date, Visa has not responded to the claims and continues to withhold the $10,000 penalty from both banks, according to the lawsuit.

      Visa hit the company’s banks in January 2013 with two massive fees, which the banks passed on to the company, taking $12 million from its Wells Fargo account and $1.3 million from its Fifth Third Bank account. The fines consisted of an operating expense recovery assessment and a counterfeit fraud recover assessment, which were then—per the agreement between Genesco and its banks—passed on to the merchant.

      “Visa’s imposition of the (fines) is a violation of Visa’s contract (with the banks), because at the time of the intrusion and all other relevant times, Genesco was in compliance with the PCI-DSS requirements,” the lawsuit stated. It added later, “Visa does not even pretend that the Non-Compliance Fines represent actual damages that Visa incurred by reason of the Acquiring Banks’ alleged failure to cause Genesco to maintain compliance with the PCI-DSS requirements.”

      If the courts agree, credit-card companies would not be allowed to fine merchants except for actual, provable damages, which could severely limit the incentives to follow the PCI DSS security standards.

      “If the courts reverse the fine, it would shake the PCI standard to its core,” George said. “If they say that you cannot enforce any penalties, then they will make PCI toothless.”

      Neither Visa nor the PCI Security Standards Council had a statement on the lawsuit by publishing time.

      Robert Lemos
      Robert Lemos is an award-winning freelance journalist who has covered information security, cybercrime and technology's impact on society for almost two decades. A former research engineer, he's written for Ars Technica, CNET, eWEEK, MIT Technology Review, Threatpost and ZDNet. He won the prestigious Sigma Delta Chi award from the Society of Professional Journalists in 2003 for his coverage of the Blaster worm and its impact, and the SANS Institute's Top Cybersecurity Journalists in 2010 and 2014.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×