California DMV Investigating Potential Credit Card Breach -- Update

By Robin Sidel and Jim Carlton 

The California Department of Motor Vehicles is investigating a potential breach of its credit card processing systems, in what may be the latest in a string of attacks that have highlighted vulnerabilities in the way payment data is handled.

Earlier attacks struck retailers like discounter Target Corp., luxury chain Neiman Marcus Group and beauty supply chain Sally Beauty Holdings Inc. This one stands out, because it was a government agency that may have been the victim.

"The Department of Motor Vehicles has been alerted by law enforcement authorities to a potential security issue within its credit card processing services," spokesman Armando Botello said.

MasterCard Inc. said it has issued an alert to banks that issue credit cards about the potential breach.

It wasn't immediately clear how extensive any breach may have been or how many cards may have been compromised.

As of Jan. 1, 2013--the most recent date for which data has been released --the DMV reported 24 million licensed drivers in California and 32 million registered vehicles.

Representatives of the credit-card industry and the motor vehicle agency were discussing the situation on a conference call Saturday evening, a person familiar with the matter said.

The DMV said it is investigating the potential breach and working with state and federal law enforcement, its credit card processor, and card companies themselves. It is also performing a forensic review of its computer systems.

Mr. Botello said there is no evidence yet that someone had infiltrated the agency's computer systems.

Motor vehicle agencies in states including Utah and Minnesota have reported unauthorized access to drivers' personal data in recent years. Such incidents rarely have included credit-card information, however.

The California DMV has been hit with other computer problems in recent years. In August 2012, for example, lines formed at DMV offices statewide after the agency's computers crashed due to problems DMV officials attributed to network or router problems.

Last week, California Attorney General Kamala Harris warned the state was a top target for international gangs of computer hackers.

Write to Robin Sidel at [e-mail] and Jim Carlton at [e-mail]

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