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CNN Live Today
Credit Card Breach; Stolen Identity
Aired June 20, 2005 - 10:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Let's take a look at what's happening ""Now in the News."
A seismologist says the spate of earthquakes around the Pacific Rim is not a sign that the big one is imminent. Another quake struck off the California coast northwest of San Francisco yesterday.
Secretary of State Condoleezza Rice pushes for democratic reforms in the Middle East, and she calls on Egypt to play a leading role. Rice spoke at Cairo's American University this morning. She also had strong words for Syra, urging the government to join the progress for democracy.
A spike in crude oil prices sent the financial markets downward today. Stocks opened lower this morning after crude oil futures rose to nearly $60 a barrel. The soaring prices were fueled by concern that U.S. refineries won't be able to cope with increasing demand.
Searchers have returned to the Uinta Mountains in Utah this morning looking for any sign of a missing Boy Scout. Brennan Hawkins disappeared Friday from a scouting camp about 80 miles east of Salt Lake City. Three thousand volunteers joined in the search over the weekend.
And now CNN.com is offering a whole new way to get the headlines. Just log on to our Web site and click on "watch" to check out the most popular stories, everything from politics and sports to entertainment. And it's free on CNN.com.
Good morning. Thank you for starting your week with us at CNN LIVE TODAY.
It is 9:00 a.m. in Salt Lake City, Utah; 11:00 a.m. in Washington, D.C.; and 7:30 p.m. in Kabul, Afghanistan. From CNN Center in Atlanta, I'm Daryn Kagan.
Up first this hour, we have new information about a credit card breach that put millions of cardholders at risk for fraud. It appears that a credit card processing company that was hit by computer hackers had consumer records stored in its database, records it apparently had no business keeping.
CNN senior correspondent Allan Chernoff is following the developments from New York.
Allan, hello.
ALLAN CHERNOFF, CNN SR. FINANCE CORRESPONDENT: Good morning, Daryn.
And CardSystem Solutions, the card data processor here, is confirming to CNN that in fact it did keep consumer records improperly in its database. This database containing information of cards that had transactions rejected.
The company says it was trying to figure out why in fact those transactions were rejected. A company spokesperson telling CNN, "We were out of compliance and we recognize that file was out of compliance with the association rules." And the association here, the Mastercard and Visa association. So this is pretty serious stuff here for the company.
The company also is confirming that a hacker or hackers actually accessed the system and downloaded the numbers of about 200,000 cardholders. Now, this would include 68,000 Mastercards, about 100,000 Visas, and 30,000 other cards. The information that the hackers do have, cardholder names, the card numbers, and also, very importantly, the security codes, that three-digit security code on the back of the card. And that apparently is very helpful for people who are trying to commit fraud.
So a very serious security breach here.
Now, I know the number 40 million has been talked about through the weekend. Forty million is the number of cards that actually are on the company's database.
Now, here's a statement from the company trying to explain exactly what happened. They're saying that they identified a potential security incident on Sunday, May 22. They say that appears to be when the hackers downloaded this file.
The next day, CardSystems contacted the FBI, and then Visa and Mastercard were notified to alert them of a possible security incident. The company also says that "We're sparing no effort to get to the bottom of this matter." But clearly, part of the problem is with the company itself holding on to these consumer -- the consumer information.
Now, very interestingly, Mastercard is saying that it actually first identified the problem back in April. It contacted some banks, figured out exactly the source of the problem, and then went to CardSystems Solutions. Mastercard basically contradicting what CardSystems is saying, that they had really found out about this a month earlier, and even had investigators working on it, the FBI, and also a third party looking into the whole incident.
So clearly, CardSystems has some very serious questions confronting itself this morning -- Daryn.
KAGAN: I think the big question, though, is for people who hold a Mastercard or a Visa. You should follow the regular steps that we talking about if you think your identity has been compromised?
CHERNOFF: The most important thing that a person can do is check their statements. If you're concerned, go online, have a look at your statement online, or call your credit card company.
Make sure that every charge there is a charge that you or somebody in your family actually made. If it appears that there is an unauthorized transaction there, you have to tell the card company. They won't hold you responsible, but it's up to you to actually identify that charge. And if you do find a charge such as that, that you did not authorize, you might want to go ahead and cancel the card, get an entirely new card number.
KAGAN: Allan Chernoff, live from New York City. Thank you.
The companies do say that the Social Security numbers were not at risk in this latest breach, but what if a thief does tap into your personal data and uses it?
CNN's Alina Cho introduces us to a woman who spent a lot of time trying to recover her stolen identity.
(BEGIN VIDEOTAPE)
ALINA CHO, CNN CORRESPONDENT (voice-over): Her business card lets you know instantly who Mari Frank is, because once another woman, a woman who didn't even look like her, became her.
MARI FRANK, IDENTITY THEFT VICTIM: When they searched this woman's home, they found a whole desk full of me. They found credit cards, they found checks, they found a suit against me at her house for Thrifty Rental Car for the car that she rented and totaled.
CHO: In 1996, the woman, posing as Frank's business associate, requested and got her credit report which listed her Social Security number. Once she had the number, Frank says the woman went to town.
FRANK: She basically was able to get my whole life, not only my personal life, but my professional life, with just one thing, the Social Security number.
CHO: It took a year for Frank to clear her name and her credit.
FRANK: That Social Security number is the key to the kingdom of identity theft.
CHO (on camera): When Social Security numbers were first issued in 1936, the federal government promised they would never become national I.D. numbers. But over time, as a practical matter, that's exactly what's happened. So much so, today Social Security is the most frequently used and abused record-keeping number in the United States.
FRANK: I became an expert by necessity, so to speak
CHO (voice-over): Frank is the author of two books on identity theft. She also counsels victim on how to deal with it, how others can avoid it.
FRANK: Practically speaking, you cannot live your life without giving your Social Security number. But you can be stingy with it. The key issue for any consumer watching this is, always ask, "Why do you need this? Is it necessary to the transaction that I'm giving you?"
CHO: Frank says the only reason legally to give out your Social Security number is for a specific government purpose, like taxes. The doctor's office would only need it to put it on a death certificate. Credit card companies always request it for background checks, but Frank says they don't need it. And consumers don't know they can say no
FRANK: They can use your name, your address and other identifiers. But they will push on you, and they can deny you credit if you refuse to give your Social Security number because you're going to look suspicious.
CHO: Another tip, never carry your Social Security number in your wallet in case it gets stolen. I had mine on my health insurance card.
(on camera): Yes.
FRANK: This looks like a Social Security number.
CHO: That is my Social Security number.
FRANK: OK. Not a good idea.
CHO (voice-over): Mari Frank is very serious about letting the world know who she is. And her picture, she feels, is a better and safer identification than any number.
Alina Cho, CNN, Boston.
(END VIDEOTAPE)
KAGAN: And here's some online resources you can use to help protect your personal information and identity. At money.cnn.com/security, "Mission Security" includes a guide to protecting credit card information. There are also links to credit reporting agencies. Also, there are some tips on what to do if your employer loses your information.
Are you at risk? You can find out how to protect yourself and your privacy and your credit in a special edition of "NEWSNIGHT" tonight at 10:00 Eastern.
More deadly car bombings top the news in the fight for Iraq. An attack on a police compound in the northern city of Erbil killed at least 12 people today. More than 100 were wounded. All were police department employees.
A U.S. soldier died when a car bomb blew up near a combat patrol in Tal Afar. The soldier's death brings the number of U.S. troops killed in the Iraq war to 1,720. And in Baghdad, five Iraqi police and security officers died in a car bomb attack on a police station. One police officer was reported missing after the attack.
Operation Spear targeting insurgent hideouts in Karabila is in its fourth day. U.S. Marines say they have destroyed what was believed to be a major car bomb factory. The Marines fired tank rounds at the complex before dropping a 500-pound bomb. And that set off secondary explosions from the rigged cars inside.
An Australian man who was held captive in Iraq for 47 days says his experience was like a nightmare. Douglas Wood lives in California but was returned to Australia. He appeared at a news conference in Melbourne to say he believes the U.S.-led policy in Iraq is working.
(BEGIN VIDEO CLIP)
DOUGLAS WOOD, FREED HOSTAGE: And frankly, I'd like to apologize to both President Bush and to Prime Minister Howard for things I said under duress. I actually believe that I am proof positive that the current policy that framed the Iraqi Army of recruiting, training, embodying them worked, because it was the Iraqis who got me out. So I'm proof positive that the current policies of the American and the Australian governments is the right one.
(END VIDEO CLIP)
KAGAN: Wood was held captive for nearly seven weeks before being rescued by Iraqi troops. He says he just might return to Iraq.
The cost of fighting wars in Iraq and Afghanistan may be going up again. The House plans to vote on a bill today approving an extra $45 billion for military operations. That's on top of $350 billion that's already been allocated. The money is part of a Pentagon spending measure for next year.
In Afghanistan today, officials announced the arrest of three Pakistanis in an alleged plot to assassinate the U.S. ambassador to that country. Officials say Ambassador Zalmay Khalilzad was not harmed in the plot. The suspects were caught on Saturday, one day before the ambassador visited a province in the east.
The men were caught with rifles and rocket-propelled grenade launchers. They're said to have ties to terrorist groups.
After the break we're going to bring you the latest details on two missing people searches. We'll go live to Aruba for any developments in the Natalee Holloway case, including new pictures on the fourth man arrested. And we'll go live to Utah for what's happening in the case in the missing Boy Scout.
Stay tuned for those stories.
Over 300 pounds and just a little baby. We'll tell you how this little elephant is doing and where she is making her home. And later, the happy couple, Tom Cruise and Katie Holmes, walked the red carpet in London. Will the "War of the Worlds" live up to its hype? We'll take a look.
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(STOCK MARKET REPORT)
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KAGAN: In Utah, searchers are scouring the wilderness again this morning. They are looking for a missing Boy Scout. Brennan Hawkins disappeared Friday in the mountains. Reporter Jose Miguel of affiliate KSTU joins us from Summit County, Utah, with an update on the search.
Jose, hello.
JOSE MIGUEL, REPORTER, KSTU: Hey, Kagan
Searchers have started just started resuming (INAUDIBLE) once again. It has been four days since Brennan disappeared.
To quickly recap, on Friday evening, around 5:00, Brennan and a friend were climbing on a rock wall near his camp about a couple hundred (INAUDIBLE) from his camp. And the friend decided he was going to head back for dinner (INAUDIBLE) behind him shortly thereafter. He never made it back.
The search began on Friday evening and grew larger on Saturday (INAUDIBLE) so that 3,000 people were out here on Sunday hoping to find any sign of Brennan. Now, the area that they're looking at, this area directly behind me, this is the Bear River. You can (INAUDIBLE) volunteers out there right now, actually searching the river area.
(INAUDIBLE) Brennan's parents that he was actually afraid of the water so (INAUDIBLE) he might be near the water would only be by accident. This morning, it's been very emotional for the Hawkins family. They are pleading with anybody and everybody to come out here to help look for their son. And they said that this search is very close to their heart.
(INAUDIBLE)
(BEGIN VIDEO CLIP)
JODY HAWKINS, MISSING SCOUT'S MOTHER: I talked to a lot of the searchers when they came out yesterday, and they all said the same thing, "I'm sorry we didn't do anything." You know?
Toby has a different outlook because he's up in the mountains more than me (INAUDIBLE). It's not wasted effort. Even though we have 3,000 people up here looking, we didn't find anything.
That's why I told everyone when we came home, I said, "I know where he's not. And I know (INAUDIBLE) maybe he's here, maybe he's here, I know that he's not there."
I know he's not here now. I'll go retrace their steps for myself. But it is a huge help. The effort is not wasted.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SHERIFF DAVE EDMUNDS, SUMMIT COUNTY, UTAH: No, he's not well equipped. You know, he may have some basic knowledge and some survival skills. And we hope obviously that he's calling upon those. But when he went missing, he was wearing a pair of shorts and he was wearing a long-sleeve sweatshirt.
So he didn't have a lot of provisional items with him and certainly wasn't dressed that warmly. But nevertheless, since it hasn't been that cold, that may not be a major issue.
(END VIDEO CLIP)
MIGUEL: So far, a couple hundred people have shown up this morning to begin the search. (INAUDIBLE) in all this is that the weather has been cooperating.
During the day it's warm and sunny. At night, temperatures only drop to about 50 degrees. And again, since Brennan had a sweatshirt, they do believe that he was able to survive (INAUDIBLE) days. And they strongly believe that this is a search and rescue operation (INAUDIBLE) Brennan is out there waiting just to be found -- Kagan.
KAGAN: Well, it's Daryn. But thank you so much.
MIGUEL: I'm sorry.
KAGAN: That's all right. Busy out there, and the important thing is that they're looking for this missing Boy Scout. And we wish the rescuers and the family well.
Jose Miguel from KSTU, our affiliate reporting from Utah. Thank you.
Let's look at another missing person story. A fourth suspect was in court today in connection with the disappearance of an Alabama teen. Natalee Holloway has been missing for three weeks now.
Our Chris Lawrence is live in Palm Beach, Aruba, with an update on the investigation.
Chris, hello.
CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Daryn.
Police are definitely paying more attention to one family, the Dutch teenager who hit it off with Natalee the night she disappeared, and his father, who was brought in for questioning by police on Saturday and then brought back for more talks the next day. (BEGIN VIDEOTAPE)
LAWRENCE (voice-over): No charges have been filed in the disappearance of Alabama teenager Natalee Holloway. Over the weekend, police in Aruba questioned this man, but only as a witness.
Paul Van Der Sloot rushed home after speaking with investigators for hours. Van Der Sloot is a judge on the island. His teenage son Joran is one of the suspects being held.
ALLY SANTOS, FRIEND OF JORAN VAN DER SLOOT: He's a very sweet boy.
LAWRENCE: Ally Santos practically grew up with Joran Van Der Sloot.
SANTOS: It's very weird that everybody seems to be thinking that he could have done something to Natalee or something, because he's usually very protective with girls.
LAWRENCE: Natalee's friends haven't seen her since she left the bar three weeks ago with Van Der Sloot and two brothers, Satish and Deepak Kalpoe. A judge decided all three could be detained another week, even though no charges have been filed against them.
Police picked up a fourth suspect Friday, a local man who worked as a deejay on this party boat. Steven Croes' boss told CNN, Croes knows one of the brothers from a local Internet cafe.
(END VIDEOTAPE)
LAWRENCE: And there is Steven Croes right now, that you're looking at right now. This is literally from just within the last couple hours. Steven Croes being brought into court. According to Aruban law, prosecutors had to go before a judge and basically say they'd like to keep him longer and explain why they should be able to keep him up to eight days longer without bringing formal charges against him -- Daryn.
KAGAN: But still, some important questions here. Still no clue as to why this man might be connected to the case.
LAWRENCE: No, we have not heard exactly what they think his involvement may be or why they -- what they even suspect him of. Unlike the other three, who have been accused but not charged, accused of being involved somehow with kidnapping and possibly homicide, we have not heard specifically what exactly they suspect Steven Croes of.
KAGAN: And still no sign of Natalee Holloway.
LAWRENCE: No, and it's definitely taking a toll on her mother. She's very -- kind of gone from being sad and depressed to angry at the pace of the investigation. There's anywhere from 10 to 12 members of the family here at any one time. And just the strain now, going into the fourth week of the search, and still no answers for them.
KAGAN: Yes, understandable. Difficult time for that family. Chris Lawrence from Aruba. Thank you.
Secretary of State Condoleezza Rice issues a challenge for Egypt, its hope of spreading democracy. Will Egypt become an example for the rest of the region? A live report from Cairo is coming up.
And a very special blessing in St. Peter's Square. We'll tell you about that coming up next.
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KAGAN: Turning the information flow around, do you know what today is? It's the first day of Lightning Awareness Week. I know that was the first guess at home. We'd like to enlighten you a little bit. Also, we're about to have the summer solstice, aren't we?
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KAGAN: A very big baby girl, we'll have her story and the pictures coming up in our news from around the world.
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