Last holiday season, unless you lived in a cave, you probably heard about Target’s security breaches that exposed millions of their loyal customers to possible identity theft. It was revealed that identity thieves stole millions of in-store customer credit and debit card information, including addresses and phone numbers. While we are all at risk for identity theft, Target’s security breach opened its’ customers to an even greater risk.
It’s fair to ask, in today’s digital age, with so many technological innovations, why aren’t these giant retailers better able to protect us from this type of fraud?
John Mulligan, the CFO of Target, went public in February with his perspective on how chip-enabled credit and debit cards, or smartcards, must be adopted in the US as a vital step in the battle to keep consumers safe from identity thieves.
The US has lagged in adopting chip technology that is pretty standard in much of the world. In the US, our credit and debit cards use outdated magnetic strip technology. Once state-of-the-art, cards with magnetic strips store your personal information and are, as we all now know, easy pickings for technologically savvy identity thieves. To date, banks and credit card companies have not embraced smartcard technology. Consumers, who are likely unfamiliar with this safer, more modern technology, aren’t demanding changes.
What’s so great about smartcards? They encrypt your personal information that you “share” with in-store sales terminals. Even if someone manages to get your card number, unless they have the chip, it’s rendered useless. According to Mulligan, Target plans to further boost security with their REDcard® by adding four-digit personal identification numbers (PIN) for transactions.
It’s too bad that it took this major security breach to get Target to push ahead with smartcard technology, but hopefully other retailers will follow their lead and we will all be safer for it.
In the meantime we should all continue to protect ourselves from identity theft wherever we are, online, in-store, or on our smartphones.
More about mobile shopping and identity theft in our next blog post!
Image courtesy of Flickr user Håkan Dahlström.