Heartland Payment Systems seems to be overcoming its problems. In 2006 the company that processed more credit and debit card transactions than any other in the country became internationally famous for allowing a breach that compromised an estimated 100 million charge card accounts.
The tab is still running. Figures released by Heartland earlier this month show that costs associated with the breach have reached nearly $140 million. This includes a $60 million settlement with Visa, a $3.5 million settlement with American Express, and more than $26 million in legal fees. It also includes the nearly $43 million that Heartland has earmarked for potential litigation in the matter.
The company will have to contend with a $4 million class action consumer lawsuit that was green-lighted by a federal court. The proposal suggests that individuals could get as much as $175 for out-of-pocket expenses related to such costs as card cancellations and unauthorized use of their cards. Victims of identity theft, however, could get up to $10,000 apiece.
This suit is a consolidation of 16 separate class-action suits that were filed in the first two years following the breach.
All is not bad for Heartland, however. The company posted its April earnings, and according to that report, income is up 33 percent. Part of this coincides with the easing of recession-related belt-tightening and increased use of credit cards (according to ComputerWorld, an industry trade publication, Visa and MasterCard this month reported sizable upswings in their revenues from purchases). But Heartland’s new profits could also reflect a resurgent faith in the company after it had spent a year introducing new security and gatekeeping measures.
Another positive sign: Over the next 18 months Heartland plans to hire 1,200 employees. The hiring already has started with 100 hires, many in sales and marketing.
Heartland Payment Systems (HPY), 90 Nassau Street, Second Floor, Princeton 08542; 888-798-3131; fax, 609-683-3815. Robert Carr, CEO. www.heartlandpaymentsystems.com