Thursday, December 19, 2013

Target and Credit Card Theft–If Ignorance Is Bliss ….

Leadership is about taking responsibility, not making excuses. - Mitt Romney

News of the compromise of 40 million debit and credit cards at Target in the US seems to have shocked a lot of consumers this morning and I have no idea why.

Once consumers get it into their mind that pins and chips don’t protect their plastic assets, maybe then they will stop being surprised to hear they have been compromised yet again and instead will demand better of the institutions that issue the cards and the organizations that accept them for transactions.

Even those of us inside the system have had our share of compromises.  I have had my personal and banking information given away three times by bank employees on the take – twice in the US and once in Canada.

You have to trust the system but when the system’s weakest link is human greed, there is not much standing between you and financial complexity.

My favorite incident, if you can call it that, occurred about 10 years ago when one of my credit cards was compromised.  When I called customer support to ask why a transaction had just been blocked, I was told that there was suspicious activity on the card.

Upon subsequent exploration, the card had allegedly been used in person (not online) in Germany, Brazil and the US over the course of about 4 hours on the previous day.

The customer support person asked me if the card was still in my possession to which I answered yes.  When I indicated that I had never been to Germany and Brazil in my Life, she suggested that maybe I had traveled there but just didn’t remember.  I assured her that my short term memory was working just fine.

In the discussion that ensued where she was trying to prove to her own satisfaction that I wasn’t in all three nations within a 4-hour window, I finally asked her this question.

“Do you know how I can prove that I wasn’t physically in Germany, Brazil and the US within a 4 hour window yesterday?”

“How?”, she asked.

“Because the laws of physics don’t allow it”, I replied.

She didn’t understand my sense of humor.

Here’s the best part.

She indicated that my current card was now cancelled (which was cool), a new card would be issued immediately(arriving in two days), would need to be activated, blah blah blah blah.

The next day, I was contacted by the bank and told that when the new card arrived, I was to destroy it and wait for another card.  Why? Because the new card had already been compromised, activated and used from somewhere within the credit card facility before I even had a chance to touch it and activate it.  Customer support had no official explanation of how this could happen.

Someone knows though.

Once again the weakest link being human greed had reigned supreme over “checks and balances”.

Better systems exist to protect our security

Biometrics and other security techniques exist and despite industry claims that they are in their infancy, some of my clients have been using them for decades.

Do you know what the real problem is with implementing such technology?

1. A lot of consumers would need to be trained to use new security technology.

2. We will need to pay a little extra for devices that ensure security, either at home or in the form of fees to cover technology implemented by others.

3. Many institutions will have to pay a lot of money to implement such systems.

It all comes down to how badly we want something, doesn’t it?

And there’s the rub.  Every time you get ripped off, the institutions pay you back and get reimbursed themselves.  They even get to write off any costs absorbed in processing compromises so there’s no downside to them.

It’s all offloaded onto the consumer who may live with the ramifications for a long time, depending on the nature of the compromise.

However, to create a new system requires a major outlay of capital on the part of the institutions, some of which would be passed on to the consumer in fees to cover the implementation.

And as long as we (the royal we) refuse to suck it up and pay for the technology that will provide the financial and personal identity security that we demand, then we need to stop acting surprised every time something like this happens.

Of course, having been compromised three times by employees of national banks, I can assure you that there will always be a weakest link.

But at least there will be a lot fewer of them.

In service and servanthood,


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