VISTA, Calif. (CN) – The Lawrence Welk Resort says a tech company disabled its computer security system, making 1,427 customers’ credit cards vulnerable to ID theft. Welk says it paid Micros Systems $100,000 for the botched job, to “ensure compliance with evolving Visa and other industry security standards,” and that Visa, for “no legitimate reason,” ordered banks to withhold $500,000 that should have gone to the resort.
The Welk Resort, a large housing development in North San Diego County, sued Visa and Micros Systems in Superior Court.
Welk describes Visa as “a highly secretive organization operating to maximize the profits of its member banks and other member entities by shielding its operations, decision-making processes and methodologies from the scrutiny of merchants and customers from which those profits ultimately derive.”
Welk says it hired Micros Systems in 2007 to install a $100,000 new security system, to “ensure compliance with evolving Visa and other industry security standards.”
During installation, Micros allegedly disabled the resort’s computer security apparatus causing the data of over 1,427 credit and debit card transactions to be vulnerable to Internet thieves.
Welk says the issue was “promptly and fully resolved,” but without its knowledge or consent, Visa “unilaterally instructed its acquiring bank to withhold some $500,000 in monies owing to Plaintiff.”
Even though Visa was protected and only the resort and its customers were at risk, Visa refused to cover the debits and “had no legitimate reason” for doing so, Welk says.
Micros employees James Corey, Nicole Ayer and Rene Rosales are also named as defendants.
Welk seeks damages for intentional and negligent interference with contractual relations, intentional and negligent interference with prospective economic advantage, negligent hiring and supervision, conversion, violation of right to fair procedure and breach of contract.
It seeks an accounting and damages. It is represented by Nicholas Hornberger with Hornberger & Brewer of Los Angeles.