Retailer fights PCI fines for noncompliance after breach, sues Visa

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In a landmark case, a company is challenging costly penalties levied for noncompliance of Payment Card Industry (PCI) security standards, by suing the credit card company that imposed the fines.

Last Thursday, Genesco, a Nashville, Tenn.-based sportswear company, filed a lawsuit against Visa to recoup more than $13 million in fines imposed on it after a 2010 breach. Visa is among the credit card processing companies that self-regulate PCI compliance standards, and are given oversight to fine companies for violating the rules.

In the incident, a part of Genesco's computer system was hacked, potentially exposing credit and debit card details of customers to intruders. At the time, Genesco notified customers about the breach, but provided no details on the number of individuals impacted. It did, however, recommend that customers monitor their accounts for potential fraud.

In the complaint, filed in a United States District Court in Nashville, Genesco said that Visa “had no reasonable basis for concluding that Genesco was non-compliant with the PCI DSS requirement at the time of the intrusion or at any other relevant time.” The PCI standards in question involve safety requirements for the storing of card data.

Genesco claims that during the system intrusion, hackers did not steal any stored payment card information on its computer network, but tried to access data it was transmitting to credit card processors. The company also said that many of the accounts Visa flagged as being potentially compromised in the incident, and eligible for its Account Data Compromise Recovery process (ADCR), were not accessed in the breach due to Genesco rebooting its servers, which caused log files containing sensitive cardholder data to be overwritten before hackers accessed it.

According to Genesco, attackers used "packet sniffer technology,” which captures and analyzes information as it passes through a network.  

“The criminals did this by inserting into Genesco's computer network malicious software that employed ‘packet sniffer' technology custom designed to acquire account data while the data was in transit through Genesco's computer network [and] on its way to Fifth Third Bank or Wells Fargo for transaction approval,” said the complaint.

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