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SCHENECTADY
Bank sues over theft of debit card data
Trustco says Five Guys security allowed breach
BY DAVID LOMBARDO Gazette Reporter

    Several area Five Guys Burgers and Fries restaurants are being accused by Trustco Bank of failing to protect its customers’ debit card information, which was used to make nearly $90,000 in fraudulent purchases.
    In a lawsuit filed May 22 in state Supreme Court in Schenectady County, the Glenville bank is seeking to recoup money that was stolen from debit card accounts it authorized and operated. Trustco is alleging that inadequate security measures by the popular fast food chain at four Capital Region locations led to customers’ debit card information being used for 376 illegal transactions worth $89,835.
    The four locations — in Glenmont, Niskayuna, Queensbury and Wilton — are operated by the same franchisee as four different companies.
    The fraudulent purchases, which were made in November and December of last year, were noticed by Trustco late in 2011, when the bank determined that the debit cards being used illegally had all made purchases at a Five Guys location.
    Trustco’s interest stems from its role as the issuer of the debit cards, which are a MasterCard brand. MasterCard also tracked the fraud and confi rmed the purchase pattern indicating that the debit card information was stolen from Five Guys.
    Once the fraudulent purchases were detected, Trustco refunded its customers the non-authorized amount and issued new cards. Trustco is looking to recoup the reimbursement costs and about $14,000 in administrative costs related to monitoring the fraud and issuing new cards with new information.
    The suit alleges that the Five Guys franchises are responsible for the fraudulent purchases because it failed in its “duty to properly maintain and protect cardholder data.”
    Trustco would not comment on the pending suit.
    Molly Catalano, a spokeswoman for the Five Guys parent company, also would not comment on the pending lawsuit, but she would comment on the compromised security system, which she said impacted more than just Trustco debit card users.
    When Five Guys was notifi ed of the compromised security it contacted the United States Secret Service, card payment companies, and electronic security experts to investigate the failure and to fi x the problem. The breach has since been fi xed and the company maintains that electronic transactions are safe at all its locations.
    “We have taken all possible steps to ensure that this never happens again. Any customer affected by this issue has been notified by their bank or credit card issuer,” Catalano said.
    Trustco alleges in its suit that the Five Guys franchises violated the law by failing to notify customers of the security breach. ...........................>>>>.............................>>>>........................http://www.dailygazette.net/De.....r00101&AppName=1