A consumer advocacy group is warning that if banks fail to voluntarily adopt PIN technology for credit cards on their own terms, they may face congressional mandates.
Consumer Policy Solutions, a group that promotes consumer-friendly public policies, launched the Protect My Data campaign on Monday to advocate for the implementation of chip and PIN technology for credit and debit cards. It claims the move will significantly enhance credit card security.
Last October, President Barack Obama issued an executive order requiring federal agencies to adopt chip-and-PIN technology for all payment terminals and government-issued credit cards, and pressure is growing for private card issuers to follow suit. (RELATED: Without Bank Participation, Executive Order on Credit Cards Falls Short for Consumers)
“As data breaches become more of a common occurrence in today’s digital world, consumers need and expect a sound data security system that protects their personal information,” Consumer Policy Solutions President Debra Berlyn said in a press release.
“With access to the most advanced technology available, there is no reason for this pattern of half-hearted efforts to continue,” she said. “A crucial element in improving our current system is a migration from our outdated chip and signature payment cards to chip and PIN equipped payment cards.” (RELATED: JP Morgan Won’t Say Whether Obama’s Credit Card Was Compromised in Hack)
According to Business Insider, “credit card companies have set an October deadline for the switch to chip-enabled cards, which come with embedded computer chips that make them far more difficult to clone,” but have thus far resisted calls to issue personal identification numbers (PIN’s), which would provide greater security than the current practice of signature verification.
Card issuers generally cite two impediments to issuing PIN’s: that they “would require a much larger investment by card issuers,” and that consumers might have difficulty remembering a new four-digit PIN when making purchases.
However, the campaign counters on its website that, “every day, consumers visit the ATM, log onto email and social network accounts, and shop online, successfully reciting PIN codes and passwords from memory.”
The site also points out that, “Studies have shown we use an average of eight passwords a day, with the capacity to remember even more,” and says card issuers are relying on “a tired, unsubstantiated excuse that continues to challenge reasonable solutions for American consumers.”
“In terms of the cost,” Berlyn told The Daily Caller News Foundation, “the financial institutions aren’t interested in spending the money to upgrade the technology, but it is a basic issue of protecting consumers.” (RELATED: Former Home Depot Employee Says Security Team was Understaffed, Warnings Were Ignored)
She added that chip and PIN technology “results in greater protections and greater cost-savings for consumers and business, and it would seem to make sense down the road” despite the up-front costs of implementation.
Perhaps more importantly, at least from the perspective of the banks, Berlyn also pointed out that if financial institutions neglect to adopt PINs, Congress could eventually require them as a consumer protection measure.
Although she doesn’t believe a government mandate is the ultimate solution, Berlyn did say she is pleased that some members of Congress are engaged on the issue. (RELATED: Should Government Require PIN’s for Credit Cards?)
“Congressional recognition of chip and PIN by champions such as Senator Amy Klobuchar and Senator Mark Warner and through the planned ‘Cyber Week’ in March brings us one step closer to institutionalizing these protections once and for all,” she claimed.
“Through this new campaign,” she elaborated in the press release, “we are urging the gamut of decision makers—state and federal legislators and regulators, the financial sector, consumer-advocacy groups, and American consumers everywhere—to work together to supply Americans with technology widely available across the globe.”
“American consumers deserve the strongest safeguard available,” she concluded, “and that safeguard is chip and PIN.”
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