Hundreds of Bermudians may have been the victims of credit card fraud stemming from a US security breach in January.

Many people have had their cards cancelled due to suspicious activity as criminals are using credit cards cloned from information stolen from a credit card processing company in the US.

Capital G President and CEO John Kephart said that around five to six percent of all cardholders in Bermuda have experienced some degree of fraud.

"There's a lag period of time, and then the copied cards appear," said Mr. Kephart. "The general consensus is that this is the wave of cards coming out of the breach in January.

"It has been a terrible year in 2009. Internationally, some businesses have lost 14 to 15 percent of their card portfolios, but in Bermuda we're nowhere near that."

During the January security breach one of the largest in history tens of millions of credit card numbers may have been stolen from New Jersey-based processor Heartland Payment Systems, through the use of malicious software.

Criminals use the information to create duplicate cards, which they then use to make purchases at various retailers.

According to Mr. Kephart, the theft has affected cards throughout the world. He said Bermuda has been affected more than some areas because locals frequently travel.

He explained that card fraud is typically detected with an artificial intelligence system, which detects patterns of spending.

"Our fraud system is designed to stop the account before the bigger purchases.

"The fact is with the volume of transactions, it's impossible for a person to look through all of them."

While each incident of fraud costs the bank money, stolen money is returned to the account, so customers do not lose out financially.

"The important thing is that the client has lost nothing. It's just a tremendous inconvenience."

To help catch fraud, customers are asked to look at their card statements for suspicious purchases, and to notify banks before leaving the Island to help make sure genuine purchases aren't blocked for security reasons.

Representatives for the Bank of Bermuda did not respond by press time, but a Butterfield Bank spokesman said: "Butterfield has not experienced any significant increases in the amount of credit card fraud."