HARRISBURG P.A. – The $2.1 billion Pennsylvania State Employees Credit Union has filed suit against BJ’S Wholesale Club and Fifth Third Bank over losses the credit union suffered in the wake of a card data compromise at the big box retailer. “The Visa cards from which BJ’s retained magnetic stripe information included over 20,000 Visa cards issued by PSECU to its members. A substantial number of those PSECU members used their Visa cards at BJ’s stores located in Pennsylvania, and those transactions enabled BJ’s to obtain and retain those Visa cardholders’ magnetic stripe information,” the credit union charged. “Upon information and belief, as a result of the acts and omissions, unauthorized third parties were able to obtain, from BJ’s electronic records, the Visa card magnetic stripe information retained by BJ’s between at least July 1, 2003 and February 29, 2004,” the lawsuit states. According to the court papers filed with the U.S. District Court for the Middle District of Pennsylvania, the credit union valued the loss at $98,000 for the cost of the breach. The credit union lost roughly $5,000 to fraud because of the compromise and then additional money reissuing plastics. The credit union reissued 20,029 cards because of the data compromise, which the credit union argued was made worse because BJ’s stored all the card data. In normal circumstances, a limited card data breach does not mean that compromised cards would be in too much danger of fraud. Processors of later transactions can still check the data contained in the magnetic stripe as an additional security measure. But in compromises like the one that PSECU alleged, so much of the card data was compromised that the credit union had no choice but to reissue the cards. PSECU is alleging breach of contract since it was the third party beneficiary of the contract between the bank and the merchant that should have directed the merchant not to hold as much card data as it had. Judge J. Andrew Smyser will hear motions on the case scheduling on September 17. -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.