Banking & Finance  November 28, 2014

Holiday season opens with trouble in the cards

It seems only fitting – given that it’s black Friday – to weigh in on a shopping issue, and it’s this: When you walk into Target or Home Depot or TJ Maxx or any of thousands of retail stores online and on main street, how secure is your debit or credit card?

Not very.

As reported in our banking section this week, after a series of recent high-profile card breaches at Home Depot and Target, among others, retailers and banks and credit unions are battling over who should pick up the cost when hackers invade electronic payment systems, rendering the cards, whose security has been breached, useless to consumers and the issuers.

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Banks and credit unions maintain that retailers should pick up at least some of the cost of re-issuing new cards and notifying consumers of how to activate them. Retailers, however, say that the considerable card-related fees they already pay these financial institutions is compensation enough.

Unfortunately, this problem isn’t a small one. As noted in Doug Storum’s article, millions of consumers nationwide are being forced to cancel and reactivate cards, erase and recreate PIN numbers, cancel and reactivate automatic payments and worry more every week about whether those small pieces of plastic that now govern retail commerce are safe.

In the argument between retailers and financial institutions we think the consumer’s interests are being overlooked. Frankly, we don’t care who picks up the tab to fix the problem. Sooner or later it will all get passed on to consumers. Fair enough. But we think, in exchange, that we deserve to have secure cards and we think the institutions that thrive as a result of our patronage should be doing more to bolster our financial security.

We also believe there should be more transparency and that financial institutions and retailers should be held accountable when systems are breached and cards rendered null and void. As consumers, just as financial institutions now are graded publicly on their financial soundness, it may be time as well to publicly assess their electronic security.

Obviously, it’s not going to be easy. Technology and endlessly innovative hackers are, as usual, far outpacing the ability of financial institutions, security firms and retailers to keep their transactions secure. All we can do is work harder.

Anyone who has been through a breach knows that it is a giant hassle. With the largest shopping season of the year upon us, it would be nice to know our debit and credit cards are breach-proof.  In the interim, it’s starting to look as if cash may be the safest payment method out there.

It seems only fitting – given that it’s black Friday – to weigh in on a shopping issue, and it’s this: When you walk into Target or Home Depot or TJ Maxx or any of thousands of retail stores online and on main street, how secure is your debit or credit card?

Not very.

As reported in our banking section this week, after a series of recent high-profile card breaches at Home Depot and Target, among others, retailers and banks and credit unions are battling over who should pick up the cost when hackers invade electronic payment…

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