DALLAS -
"When we saw the news article on this, we said, 'well, that's news to us,' " laughed K. Dusty Bowers, SVP-national sales manager for TNB Card Services. "We are not having a shortage of plastics."
Karen Fry, VP-marketing and strategic initiatives for Clearwater, Fla.-based Card Services for Credit Unions (CSCU), agreed. "Everything I've heard is that there isn't really a shortage."
Those comments came after a story in the New Haven Register in Connecticut reported that the reissuance of thousands of debit and credit cards following the data breach at TJX Cos. had led to a shortage of replacement cards.
"I checked in with Visa and (cardstock provider) Didier, and they said the queue is no more than two to five days, compared to when Visa had to reissue all the holomag cards and they were backed up by more like three to six weeks," Fry related. "All of the card manufacturers that we use have indicated they have plenty of material supplies to meet demands and have not heard from their suppliers that there are any shortages. Each indicated they would let us know if they had any problems. Right now it just seems to be a rumor."
PSCU-Financial Services, in Tampa, Fla., also related that it had plenty of card stock on hand. "We haven't heard from anyone that they're running short," relayed Kenton Potterton, director of credit services and new product development. "It could be that some credit unions, who purchase card stock on their own, use a smaller manufacturer who can't ramp up capacity like ours can. Or, if they had specialized cards, like the mini-card, for example, they might not have the ability to replenish those as fast."
There are a number of steps credit unions and/or their card processors can take to alleviate a shortage.
"We do a good job managing our inventories," Bowers offered. "We don't advise reissuing cards if the only data that was compromised was the account number, for example. Now if Track 1 or Track 2 data, or the expiration date are also involved, then we do."
Additionally, TNB determines which accounts are at higher risk. For example, an account where the credit line is maxed out is at far less risk than an account that still has a lot of credit available. Then it can use the Falcon neural network to monitor more closely those cards that are determined to be at high risk, rather than immediately reissuing them.
"Members aren't running to their credit unions saying 'reissue my card,'" Bowers commented. "If you educate them well, that won't happen. We put out a lot of bulletins so they can educate their members. Credit unions need to have a real close relationship with their processor partner so they can determine when it makes sense to reissue or not."
Most card processors and card stock providers have planned for just these types of occasions, the experts told Credit Union Journal.
"We anticipate these compromises," Potterton advised. "They're occurring faster than we'd like, but we know they're going to happen. The card manufacturer we work with has significantly ramped up its capacity and has assured us it has reserved capacity for us. There certainly are a number of cards being reissued right now, but we can replenish in a matter of weeks."
PSCU also has a new back-up plan: digital plastic.
"We ask our credit card issuers to provide us with an image of their card, then we can print it on plain, white plastic until new plastic can be issued," he explained. "It's great for smaller quantities or disaster recovery. We're talking to credit unions about them buying pre-printed stock, which can be less expensive, and then if they run out of that, we can use the digital plastic. Not only is it a great back-up for situations like this data breach, but it also offers a customizable platform that is more flexible for branding purposes."
While the card processors interviewed for this story have had no shortage of card stock, that doesn't mean the TJX data breach has had no effect on them. "Certainly there are a lot of orders going through right now," Potterton related. "We put extra call center people in place to take orders. Everyone is scrambling."
