- - Monday, April 2, 2012

ATLANTA — Visa Inc. has dropped the card processor involved in a massive data breach from its registry of providers that meet data security standards.

Global Payments CEO Paul R. Garcia noted that the company continues to process Visa transactions, but that being dropped from the registry “could give our partners some pause that they’re doing business with someone who experienced a breach.”

Mr. Garcia said he expects to Global Payments to be reinstated once it has been issued a new report of compliance. But he declined to specify when that might be. He said the situation is “absolutely contained” but that the investigation is continuing and that parts of it still need to be resolved.

Global Payments says the data breach may affect less than 1.5 million credit cards from various issuers in North America. The company said that credit card data may have been stolen, but that cardholder names, addresses and Social Security numbers were not obtained.

The company said it will set up a website later Monday to help consumers who might be affected by the breach.

Both Visa and MasterCard say their own systems weren’t compromised.

Visa and MasterCard had said Friday that they notified their cardholders of the potential for identity theft and illicit charges because of the breach.

Aside from the U.S., Global Payments provides its services to government agencies, businesses and others in Canada, Europe and the Asia-Pacific region.


Local investors buy newspapers for $55M

PHILADELPHIA — A group of business leaders announced Monday they have closed a deal to purchase Philadelphia’s two largest newspapers from hedge funds for approximately $55 million, a fraction of what investors paid for them in 2006.

The buyers, who include cable TV mogul H.F. “Gerry” Lenfest, powerful New Jersey Democrat George Norcross III and former New Jersey Nets owner Lewis Katz, said they plan to keep the newspapers’ tradition of strong journalism alive in the digital age.

They had an exclusive option to bid for Philadelphia Media Network, which also operates the Philly.com website and a weekly sports publication.

The purchase price - which includes up to $10 million from investors to fund operations - is less than 15 percent of the $515 million paid by a group of investors in 2006, and far less than the $139 million creditors paid at a 2010 bankruptcy auction.

“These newspapers have an historic tradition of outstanding journalism in our city and we want to preserve that tradition and marry it to the exciting digital opportunities that are revolution the news business,” Mr. Katz said.

The buyers established a new company, Interstate General Media LLC, to operate Philadelphia Media Network.

The sale comes as Philadelphia Media Network has announced plans to cut 45 positions this month, including 40 in the newsroom. Last year, the newsrooms lost 20 jobs.

Company officials have cited both finances and the consolidation of newsroom functions in discussing the cuts. Some staff work now appears in both newspapers, a trend that will grow as beat reporters and photographers handle assignments for both the broadsheet Inquirer and tabloid Daily News.


Dow plans 900 layoffs due to European demand

MIDLAND — The Dow Chemical Co. plans to lay off about 900 people in response to weak demand for its products in Europe.

The Midland chemical manufacturer said Monday that the positions will be cut as part of a plan to trim costs by about $250 million each year. The company also will shut down factories in Illinois, Portugal, Hungary and Brazil, and it will idle a plant in the Netherlands.

Dow Chairman and CEO Andrew N. Liveris said the company made the decision to adapt to a volatile economy, especially in Western Europe.

Dow says it will book a first-quarter charge of $350 million in the first quarter for severance packages, asset impairments and other items related to its cost-cutting plan.

Shares rose 3 cents to $34.67 in morning trading.


AmEx pulls gift cards because of state law

TRENTON — American Express has become the first company to pull its gift cards from New Jersey pharmacies, groceries and convenience stores rather than attempt to comply with a new wrinkle in the state’s unclaimed property law.

AmEx spokeswoman Vanessa McCutchen said the company began pulling gift cards sold through third-party retailers last week. As of Monday, the only way for New Jersey residents to buy AmEx gift cards, which can be used practically anywhere, is directly from the company.

New Jersey’s Treasury Department will soon require sellers to obtain the ZIP code of everyone who buys a gift card. The state believes it can then lay claim to the value of any card not redeemed after two years, under a revision to the unclaimed property law.

John Holub, president of the New Jersey Retail Merchants Association, said the law poses serious administrative burdens to businesses and potential problems for consumers.

American Express Co. and the Retail Merchants Association are among the groups that have sued. The case is being litigated. An injunction against ZIP code collections, however, was lifted in March.

“Retailers and gift card issuers like American Express have had serious concerns about the escheat law since it was passed nearly two years ago,” Mr. Holub said. “I fear many retailers are likely to follow American Express’ lead because the legal risk, technological burden and steep cost of complying is simply too great.”

From wire dispatches and staff reports



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