12:12 AM PST on Wednesday, January 25, 2006

Associated Press

CORVALLIS -- Banks and credit unions in the Corvallis area are issuing hundreds of new debit cards to customers as a result of a security breach.

KING photo

Credit and debit cards.

Carlyn Roy, chief operating officer of the OSU Federal credit union, said it appeared customers at most financial institutions in the area had been affected.

She said it appeared that debit card numbers had been compromised at the retail level. "We know it was an outside party, most likely generated from a merchant or a series of merchants," she said. The breach was detected last week by Fair Isaac Corp., a data security company.

Officers at four institutions said the size of the fraud was small-scale.

Roy said her credit union stayed open Saturday and late Monday to issue new cards. By Tuesday, she said, the credit union had issued new cards to about 70 percent of 1,200 members whose cards were flagged.

Other institutions reported fewer than 100 customers had been affected.

At the Benton County Schools Credit Union, 14 cards were compromised and half of those were hit with fraudulent charges. A customer notified the credit union two days before the general alert, manager Joe Tofte said. "We contacted our members, blocked the accounts and issued new cards," Tofte said.

Roy said that debit card owners are not liable for fraudulent use of their cards unless they have been grossly negligent or they themselves have committed fraud.