Bank of America Clarifies Breach

Bank of America now says the suspected breach of credit card data it reported earlier this month is likely linked to a third-party merchant - not a third-party service provider.

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In response to previous coverage of the breach, the bank clarified the suspected source, adding that the incident was isolated.

"This would have been an isolated incident at a third-party merchant (like a store) that may have impacted a very small number of cards, not a security breach at Bank of America or one of its vendors," says BofA spokeswoman Betty Riess in an e-mailed response.

And BofA likely was not the only card issuer affected. "A breach at a merchant location would not just be specific to Bank of America cards," Riess said.

BofA linked suspicious activity to this unnamed merchant after data from internal fraud monitoring and information from affected card brands was connected. "We take these proactive steps to protect our customers and minimize any occurrence of fraud," Riess added. "It doesn't necessarily mean that fraud has actually occurred on the account."

Earlier this month, BofA sent letters to select customers, notifying them of a possible compromise. The bank would not say how many of its accountholders were affected, but did point out that necessary steps were being taken to address known security gaps.

Fred Cate, a law professor at Indiana University who specializes in cybersecurity, says the BofA incident is a reminder that sensitive information must be secured across and within numerous links in the business and payments chain. It's not just the bank that has to ensure data and information is secure; the same precautions and security measures that are implemented in-house must be practiced by the other businesses, service providers and intermediaries with which the bank interacts.

"The entire system has to be secure," Cate says. "I think banks are doing better with, and certainly paying more attention to, ensuring that their suppliers and vendors use good security. But it is an impossible task, in the absence of federal legislation that creates a system-wide obligation to treat financial data responsibly."