Payroll Processor Breached Twice in One Month

PayChoice Warns Business Clients of Network Breaches, Potential Fraud

October 19, 2009 - Linda McGlasson, Managing Editor

For the second time in less than a month, New Jersey-based payroll processor PayChoice has alerted customers to a network breach.

PayChoice, based in Moorestown, NJ, had to take its Online Employer site offline last Thursday for a short time after the latest security breach was discovered. While the exact cause of the breach was not revealed, the company says it has taken new precautions.

"PayChoice deployed additional security measures to protect client data after the company identified a key mechanism used by online attackers," says CEO Robert Digby. PayChoice's Online Employer site was briefly taken offline after the company discovered the breach, which occurred on Oct. 14. Digby says PayChoice has reopened the site with most functionality after protecting against the methods used in the attack.

The payroll processing company, which boasts more than 125,000 business clients, warned its customers by letter about the new breach after some clients reported "phantom" employees showing up on their payrolls.

The message to PayChoice customers indicated that the hackers may have stolen customer login IDs and passwords by going through a hole in security on the website feature that helps customers change their password. PayChoice says it turned off the change-password feature to fix the vulnerability. (Full text at www.bankinfosecurity.com)

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