NPR reports on credit card security breaches and the upcoming holiday season in the United States:
Though cyber thieves have stolen millions of card numbers this year, shoppers are heading into the heavy-spending season with no new credit safeguards in place. […]
[Bryan Sartin, who heads a team of forensic computer techs for Verizon,] says data breaches happen all the time; In fact, only about a third of them are ever made public. In midtown Manhattan, that fact surprises many shoppers, like Alexandra Goodell. […]
[Jason Oxman, CEO of the Electronic Transaction Association] says the magnetic stripe worked fine until the ’90s. Then came personal computers, which could counterfeit hundreds of credit cards. Because the U.S. had a strong telecom network, retailers went to an online system to verify credit cards’ authenticity. Countries where the Internet wasn’t so great adopted so-called chip cards or smart cards.
“So that’s one reason that we haven’t used the chip cards,” Oxman says. “We haven’t needed to because our online system of authorization has been a replacement for that offline chip.”
But by this time next year, you will likely be using the new chip cards. […]
But the new chip cards are only expected to cut out about 60 percent of the fraud, which frustrates merchants. Mallory Duncan, general counsel at the National Retail Federation, fears the credit card hacks will continue because at the core, the system’s backbone is still the same — 16-digit account numbers flying across the Internet.