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    160 Million Credit Cards Stolen: Lessons For Mobile Payments

    Last Thursday, the U.S. attorney for the District of New Jersey announced indictments in Newark against a gang of Russian and Ukrainian Hackers. The hackers allegedly obtained 160 million credit card numbers from retailers such as J.C. Penney, 7-Eleven, and JetBlue and even a large credit and debit processing company, Heartland Payment Systems. The ring followed a modern version of the lesson taught by famed bank robber Willie Sutton, to “go where the money is.” As money moves from paper, to plastic, to digital transmissions from our smart phones, the crooks are sure to follow. So what is the lesson for companies in the mobile payments space? Obviously, the main business consideration is to make security of your systems paramount. But your business may just be one link in a long line of vendors and service providers. You can’t directly control the security precautions upstream or downstream. Accordingly, when you enter into contracts it is essential that you do your “due diligence” and pay particular attention to fraud and security issues in negotiating the contract. Your goal should be to disclaim as much liability as you can for your own breaches and get as much indemnification as you can for the breaches of others. That’s easier said than done, but we can help guide you through this and other legal issues in mobile payments.


    LNGS contact: Brooks Harlow (bharlow@fcclaw.com)