LowCards.com Weekly Credit Card Update–January 24, 2014
Hackers Took Sneaky Path Into Target Customers’ Wallets
It was, in essence, a cybercriminal’s dream. For months, an amorphous group of Eastern European hackers had been poking around the networks of major U.S. retailers, searching for loose portals that would take them deep into corporate systems. In early November, before the holiday shopping season began, the hackers found what they had been looking for: a wide path into Target and beyond. Entering through a digital gateway, the criminals discovered that Target’s systems were astonishingly open, lacking the virtual walls and motion detectors found in secure networks like many banks’. Story by Elizabeth A. Harris, Nicole Perlroth, Nathaniel Popper and Hilary Stout for The New York Times.
Your Debit Card Is Much More Dangerous Than You Think
Citibank this week announced that it was replacing the debit cards of customers whose accounts were compromised in the great Target Christmas hack. The names, addresses, telephone numbers and email addresses of more than 100 million Target customers got hacked but Citi delayed replacing them because it didn’t want to unnecessarily disrupt Christmas shopping. But replacing these cards with the same magnetic stripe technology is like replacing a padlock that’s securing a lockbox with another padlock after someone just used a bolt cutter on it. Look at it another way: the credit card industry is still on dial-up while the thieves are using high-speed broadband. It’s a losing battle and one the reasons why the U.S. retail industry is going to remain a target until it catches up with the rest of the world. Story by Bill Saporito for Time.
Credit Card Data Theft Rocks South Korea
The largest credit card data theft in South Korean history is now affecting nearly 20 million cardholders or 40% of the country’s population. A contractor with the Korea Credit Bureau, reportedly hired to improve the protection system on client data, loaded details of over 100 million credit card accounts onto a hard drive over the course of 2013, and sold the data. The information included names, identification numbers and card data, including those of President Park Guen-hye and U.N. Chief Ban Ki-moon. Story by Bill Hardekopf for LowCards.com.
U.S. Slow to Adopt High-Tech Credit Cards
Under pressure from credit card companies, major banks and retailers have begun to roll out the cards, which carry a computer chip and advanced security software that keeps the customer’s account number and other details invisible, even if crooks manage to steal records from a store or bank. But the conversion could take years to reach critical mass amid a squabble over who will foot the estimated $8 billion bill, and despite fears that scammers have been targeting the United States because of its outdated technology. U.S. credit card fraud rates, once the lowest in the world, have doubled in the 10 years since chip cards spread through Europe. Story by Howard Schneider and Hayley Tsukayama for the Washington Post.
Costs Rising on Target Breach
The massive data breach at Target has already cost credit unions as much as $30 million, according to the Credit Union National Association. And the bill is going up. The preliminary estimate doesn’t include fraud losses that are expected to rise in coming weeks as financial institutions report their costs. The trade group estimated that, on average, the Target breach has cost credit unions about $5.10 per card affected by the security lapse. The costs include having to reissue debit or credit cards to their members and increasing staffing to handle customer inquiries. Story by the Associated Press.
Most Complained-About Credit Card Companies
Thousands of Americans are lodging complaints with the government’s financial watchdog about their credit cards, and some issuers are being griped about a lot more than others. Of the more than 25,000 credit card complaints the Consumer Financial Protection Bureau has processed, Capital One received the biggest share, according to new analysis from the U.S. Public Interest Research Group. Based on the ratio of complaints to card purchase volume, however, GE Capital Retail garnered the highest number of grievances through September–with 88 complaints for every $1 billion in purchase volume. Story by Blake Ellis for CNN Money.
Target Tried Antitheft Cards
Target Chief Executive Gregg Steinhafel is calling on retailers and banks to adopt chip-based credit card technology to better protect shoppers. But the debate was different a decade ago, when the executive was on the other side of the issue as Target pulled the plug on a $40 million, three-year program that did just that. Target’s decision 10 years ago to end the program disappointed chip advocates who had hoped it would demonstrate the viability of chip-based cards and set the stage for their widespread use in the U.S. Since then, retailers and banks have been caught in a chicken-and-egg dilemma with retailers reluctant to invest billions of dollars on the needed infrastructure unless banks commit to spending the billions of dollars needed to issue the new cards. Story by Paul Ziobro and Robin Sidel for The Wall Street Journal.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.46 percent, slightly lower than last week’s average of 14.47 percent. Six months ago, the average was 14.32 percent. One year ago, the average was 14.32 percent.