Breach-Related Woes Continue to Pile up for Beleaguered Heartland
The breach-related troubles just keep piling on for merchant acquirer Heartland Payment Systems Inc., according to the acquirer’s annual report filed on Monday with the U.S. Securities and Exchange Commission. In the filing, Heartland revealed the data breach it sustained last year is under investigation not only by the U.S. Department of Justice, the SEC, the Federal Trade Commission, and the Office of the Comptroller of the Currency, but also by the Federal Financial Institutions Examination Council, attorneys general of several states, including Louisiana, the Canadian Privacy Commission, and other government officials.
Negative publicity from the breach, which Heartland disclosed Jan. 20, also could cause an increase in merchant attrition, according to Heartland’s filing. During 2008, 2007, and 2006, Heartland experienced average annual attrition of 17.3%, 12.6% and 11.1%, respectively. Major causes of attrition included business closures, transfers of merchants’ accounts to competitors, account closures initiated by Heartland due to heightened credit risks, or contract breaches by merchants.
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