To Reissue Cards Or Not To Reissue: ThatIs The Question
RALEIGH, N.C. - (03/13/06) Credit unions and banksstricken by the spreading credit card breach are all being facedwith the same dilemma: whether to cancel cards by the hundreds, oreven thousands, then reissue them as an out-of-pocket expense.State Employees CU in North Carolinas policy is to canceland reissue all cards that may have been breached, even if therehas been no fraud on the account, according to Jim Blaine,president of the $13 billion credit union. That means thenations second largest credit union paid roughly $500,000 toreissue more than 100,000 cards over the past year, as insurancecovers only the small number of accounts that were actuallypenetrated by fraud. Some SECU members have had their cardsreissued two or three times in the last year. As a prudentfinancial institution, we take the precautions, Blaine toldThe Credit Union Journal, of the more than 27,000 Visa debit cardsSECU replaced over the past two weeks because of the latest fraudalert. Authorities say as many as 100 credit unions and banks haverecalled more than one million Visa debit cards over the past twoweeksthe biggest mass recall ever of cards--after the cardcompany notified them the listed accounts may have been breached.Credit union and bank issuers are grappling with how to minimizethe costs. Some institutions, like SECU, are automaticallyreissuing new cards, at great expense. Others are asking customersto review their records for suspicious transactions and onlycancelling those cards. Others, still, are blocking alltransactions or just selected transactions from high-risk countriesand cities.