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Halloween is almost here and the ghosts, zombies, and witches are coming out of the woodwork. They are not nearly as scary, though, as some of the financial identity theft goblins lurking all year ‘round on social media networking sites.
Recently Ellen Richey, who serves as the chief enterprise risk officer for credit card giant Visa, Inc., issued a warning to consumers, during the annual Global Security Summit in Washington, D.C., hosted earlier this month by Visa.
Richey explained that sharing too much information over the internet can make people easy prey for cyber criminals, credit card hackers and other thieves who engage in various forms of identity theft and financial fraud. She described the security challenges now faced by the credit card payments industry as significant; thanks to the fact that many consumers are what she referred to as “chronic over-sharers” of personal data including information.
Too Much Information!
Richey cites one startling statistic, for instance, that nearly one out of every 10 consumers admits to sharing their Social Security number over a social media platform. She also cited the prevalence of people posting photographs of themselves on those kinds of public sites, where they proudly and excitedly display their new plastic. That’s totally understandable, especially for a young person who just got their first credit card in the mail and wants to share the celebration with friends. What they don’t seem to realize, however, is that by doing so they are clearly displaying all the details that hackers value.
When credit card account numbers, the 3-digit security code on the back of the card, a cardholder’s signature, the expiration date, and the face of the person who owns the card are all available for viewing on the Internet it makes the job of an identity thief a lot easier. Richey even said that during Visa’s study of this troubling issue; “We found an entry on Twitter in which the person asked about the CVV number on the back of her card, and she posted the number.”
A Big Challenge for the Industry
Her conclusion was that there is an obvious lack of education around the issue of credit card security and that the financial industry needs to recognize the reality that social media poses a significant and unique threat; to meet that challenge will require innovatively proactive measures. Meanwhile, the risk becomes greater all the time as technology speeds ahead with powerful breakthroughs such as mobile payment systems. While those make it much simpler, easier, and faster to process credit cards and other debit transactions, they simultaneously make it more difficult for card issuing companies to keep up with the pace of necessary security implementation.
Plastic Goes Digital
Consumer habits and behaviors on social media sites, for example, virtually remove the card issuer from the equation. Welcome to the digital world, where privacy is rare and the ability to capture intimate details about a person’s life through digital retrieval is expanding in an exponential way. As Richey put it, the industry is at “a crossroad in which plastic is turning into mobile.” She highlighted that fact by saying there are already seven billion mobile phone users in the world. Again she impressed upon her audience the need for education, suggesting that perhaps the credit card payment industry can harness the power and capability of new communications technologies to pursue similarly groundbreaking solutions.
Banks Need to Step it Up
Richey also promoted the implementation of EMV chip-based cards in the USA, encouraging card issuers to move forward without procrastination. The so-called pin and chip technology has been in use in other places like Europe for several years, but American banks have not introduced chip-based credit cards except in small, limited ways such as pilot programs in specific regions or markets. Many experts blame the financial industry for being slow to change and they say that much of the reluctance to embrace modern technology may due to bank-greed.
Introducing a new pin-and-chip system is expensive because it requires a new kind of infrastructure that will make current card-swiping machines obsolete. In the wake of the financial crisis that slammed the banking industry in 2008, most card issuing companies did not want to pay to provide EMV chip-based cards to their customers. During the interim, however, global rings of organized identity theft criminals have migrated to the USA and focused on American vulnerabilities and loopholes, seizing a grand opportunity to make billions of dollars from credit card hacking and fraud.
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