As consumers in Oregon and California race to the courts to file charges against Target over a massive theft of credit card and debit card information, an even scarier story is emerging. Stores and banks know their security procedures are antiquated, and seemingly do not care.
Attorneys general in Connecticut, Massachusetts, New York and other states are starting to poke and prod for information, as is the U.S. Secret Service, on behalf of the federal government. Have the retailers and bankers “failed to implement and maintain reasonable security procedures,” as the lawsuits against Target allege?
The short answer appears to be “Yes!” The legal ramifications and validity of that assessment will be worked out in court, but insightful reporting by AP Business Writer Jonathan Fahey suggests the answer has long been known.
“We are using 20th century cards against 21st century hackers” according to Mallory Duncan, general counsel at the National Retail Federation. “The thieves have moved on but the cards have not.”
Banks and retailers have not stayed current because no one is advocating on behalf of consumers, and businesses find the cost of covering the cost of fraud and thievery is way cheaper than modernizing their credit and debit cards:
“Compared to the tens of millions of transactions that are taking place every day, even the fraud that they have to pay for is small compared to the profit they are making from using less secure cards,” Duncan told the AP.
After all, it’s not like the hackers are stealing corporate financial details, it’s yours and mine.
Supposedly the credit companies have a plan to replace the dated magnetic strips with digital chips by 2015. Uh huh. Where is Congress during all this? OK, silly me. A couple of senators have made noises. Well, they all make noises.
Other countries are way ahead of the U.S., and, for that matter, the hackers. American consumers deserve better, and they are not getting it.