1st Source swaps out ATM cards after breach

June 10, 2008

By Sherry Slater, The Journal Gazette


1st Source Bank is replacing ATM cards this month for all its account holders after cyber-thieves accessed an unknown amount of debit-related data, a bank official said Wednesday.

The South Bend-based bank has not received any reports of suspicious activity, however, said James Seitz, senior vice president of consumer and electronic banking.

"Out of an overabundance of care, we're reissuing new debit cards to all our customers," he said.

Outside security consultants discovered the breach May 12, the same day it happened. The security firm alerted the bank, which immediately shut down the system and contacted law enforcement officials' Seitz declined to name the agency or agencies.

1st Source also hired a Washington-based forensic computer group to review the bank's entire computer system, looking for weaknesses. As a result, the bank has changed some of its internal systems to strengthen security.

The company mailed letters last week to account holders, asking them to closely watch their accounts for unexpected activity. Seitz blamed the "complex" nature of the investigation for the fact that letters weren't mailed until May 28 - more than two weeks after the breach.

The bank also is monitoring automated teller machine transactions .minute by minute. to stop unauthorized activity. But even if the efforts fail, account holders won.t suffer, Seitz said.

"We're certainly not holding any of our customers financially responsible for any transactions related to this breach," he said.

1st Source is offering to pay for Deluxe ID TheftBlock - at $4.95 a month - for one year for any customer who requests the service. The program monitors accounts and recovers stolen funds.

Bank officials have yet to tally the cost of mailings to customers, creating new debit cards, consultants' fees, paying for identity theft protection and employee overtime related to the security breach. Seitz called it a "considerable cost."

1st Source staffed its call center last weekend and extended weekday hours to alleviate customers' concerns.

"Actually, our customers have been very understanding," he said. "Obviously, this is something that puts a little stress on that relationship."


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