MasterCard yesterday warned of a security breach at Tuscon, AZ-based CardSystems that dwarfs recent reports of financial data loss. The company is reporting that information on up to 40 million credit cards may have been exposed at the third-party credit card payment processor, 13.9 million of those belonging to MasterCard customers.

CardSystems processes over "$15 billion in Visa, MasterCard, American Express, Discover, on-line debit and EBT transactions annually", according to the company's website.

The breach was discovered, in part, by fraud protection mechanisms employed by MasterCard, according to a statement. The companies then traced the problem to vulnerabilities within CardSystems' network, which allowed an unauthorized person to gain access to card-holder data. In a differing account, CardSystems does not make mention of MasterCard's involvement, but says that the breach occurred on May 22, 2005. On the following day, the company contacted the FBI.

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