Target’s recent data breach caused an uproar in the retail industry along with consumers. Recently, the FBI issued a three page warning to U.S. retailers to beware of more cyber attacks. The U.S. Federal Bureau of Investigation’s report outlined potential risks and warning for stores so preparations can be made. What about the consumer? Consumers should not just sit idly by, instead they also need to take heed to the warnings and make attempts to secure their shopping experience.
This information means the consumer has to become proactive with their finances. Remember when cyber attacks happen it results in stolen debit or credit card numbers, CVV codes and expiration dates. Many times the thieves have also captured the victim’s name, phone number, address and email address; this makes identity theft much easier to accomplish.
One thing consumers can do is opt to use cash more frequently as opposed to the convenience of debit or credit cards.
Many people prefer to use a debit card rather than their credit card because it renders the consumer better control over spending; if there is no money in the bank the transaction won’t go through. However, credit cards offer greater security. The downside is credit cards also come with fees attached.
Most credit card companies offer an added security and will not hold the consumer accountable for credit card fraud. The only downfalls, which in most cases aren’t major, are the consumer doesn’t have access to the “credit” on the card while the investigation is in process and they have to wait for a replacement card to be issued.
Debit cards work much differently. Once thieves get a hold of debit card information they have also gotten a personal gateway to the individuals bank account. Often times when funds are taken from a bank account the money is not refunded right away.
For those who can’t just give up their debit cards it is recommended that owners set up two accounts. This way there will be one account for spending money and another for an individual’s paycheck, if the account is exposed to fraudulent activity all of the owner’s money is not uncovered.
Regardless of the method the consumer chooses it is imperative to check accounts regularly for suspicious transactions. If any are found they should be reported immediately to the credit card establishment or their bank in order to minimize further damage. When notifying the financial institution of fraudulent activity it is also wise to follow-up the complaint in written format.
Consumers should also check their credit reports for any errors that may be present. Once thieves gain personal information they can take out loans or open new credit card accounts in the victim’s name, among other crimes.
Another way consumers can reduce their losses from credit card fraud is by using a newer type of card that uses a PIN instead of signature. These so-called smart cards have chips embedded as opposed to the magnetic strip that most cards contain. This long-established global standard is called EMV and stands for Europay, MasterCard and Visa. Smart cards are much harder to replicate in mass quantities because the personal identification number (PIN) that is required is more secure than signatures. Signatures are much easier to duplicate and too often are not checked anyway.
In 2004 the smart card was implemented in Britain and since that time fraud from stolen or lost cards has declined by 61 percent. Even in France the fraud rate has dropped dramatically in transactions which occur face-to-face.
As the EMV standard and chip-and-PIN cards mature in other countries, the United States could fall victim to increased fraud as long as it continues to use the magnetic strip. The magnetic strip leaves U.S. retailers extremely vulnerable to hackers worldwide.
The hackers which successfully tackled the number three retail chain, Target Corporation, found was to have accessed card data with programs that are believed to have originated in Russia. A 17-year-old mastermind created malware named BlackPOS, which he used to gain access to point-of-sale (POS) terminals. These vulnerabilities would be harnessed if U.S. retailers and banks decided to transition to chip card technology.
The FBI has warned retailers to look out for more cyber attacks. They issued a report outlining potential risks and warning so stores can make the necessary preparations. Consumers should also to take heed to the FBI’s cyber attack warnings and make every possible attempt to secure their shopping experience.
By: Cherese Jackson (Virginia)