Laws & Legislation

 

02 13 2014

02 13 2014

Retailers Urge Banks to Increase Data Security

In light of the recent Target security breach, which affected up to 70 million people who used their credit or debit cards at Target stores between Nov. 15 and Dec. 15, 2013, retailers are pushing for banks to increase data security initiatives around the country.

While the full impact of the breach has yet to be determined, it may prove to be the largest data leak in history for a U.S. retailer. In response to retailers’ demands, banks have stated that advanced credit card technology would not have prevented the security issues, in which perpetrators may have stolen credit card information, personal data such as customers’ names and personal identification numbers from those who used cards at Target locations during the month long holiday period.

Target, Neiman Marcus under investigation

Target has also come under fire for its delayed response in letting consumers know about the breach. While testifying before the U.S. Senate Judiciary Committee on Feb. 4, Chief Financial Officer John Mulligan told lawmakers that it was the Justice Department that first revealed details of the financial attack, CNN reported. Target then informed consumers three days later that the breach had taken place, initially claiming it occurred only during the week prior to and the weekend following Thanksgiving. What remained unknown following the testimony is how the malicious software infiltrated Target’s security system and how the perpetrators managed to obtain credentials that would allow them to gain company access.

In addition to the Senate Judiciary Committee, the Secret Service and Attorney General Eric Holder of the Justice Department have launched investigations into the matter, including a criminal search to find those responsible for the repeated incident.

Michael Kingston, chief information officer for Neiman Marcus, was similarly questioned by the Senate Judiciary Committee, as hackers also targeted and obtained information from approximately 1.1 million customers from July through October of last year, affecting 77 of its 85 U.S. locations. While the malware invasion persisted for four months, the company was not alerted to the problem until Dec. 17, when MasterCard informed the retailer that fraud had been reported on 122 cards that were used at Neiman Marcus.

In addition to concerns from the government, many American consumers who patroned the businesses during these periods are worried about the state of their private information. According to an Associated Press – GfK poll conducted Jan. 17-21, almost half of survey respondents said they have become “extremely concerned” about the risks they take when shopping as a result of the large scale breaches, Newsfactor Business stated.

Many retailers across the country have urged big banks to strengthen their protective services against cyber attacks, but the institutions have pushed back significantly against the idea. As large financial institutions may be slow moving in their attempts to increase security, small business owners may soon turn to nontraditional lenders for reliable merchant credit card processing services. Small business owners may not initially be targeted by cyber attacks, but finding smart and secure credit card processing options is vital to protecting business. For more information on secure financing and credit card use, contact National Funding today.

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