The details: http://bits.blogs.nytimes.com/2014/09/18/home-depot-says-data-from-56-million-cards-taken-in-breach/?ref=business
Home Depot recently announced that over 56 million cardholders information was lost in a breach to their system. To add to the damage it was several months before Home Depot was even aware of the issue and began to act to resolve it. This is the largest single breach of a corporation and it follows the recent scandals involving other big name companies such as Target and UPS. The exponential increase in stolen credit card information can be extremely worrisome for consumers. It has been estimated that theft malware has affected over 1000 companies in the United States and this number continues to grow.
Is this new method of cyber-attacks here to stay or will companies learn to adjust and be able to install better security to protect their client's information?
Will the increase in illegal activity provide any persuasion to consumers to move back towards cash and away from credit card companies or is the easy use of plastic money too tempting?
What other possible shifts in consumer habits do you see arising from the prevalence of these attacks?
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ReplyDeleteI don't think consumers habits will radically change in terms of switching from credit card payment to using dollar bills. Rather, I think instances like Home Depot's and Target's give consumers more reason to be preventative and monitor their credit card activity more regularly.
ReplyDeleteUnfortunately, moving to the EMV technology that makes it more difficult to hackers sounds difficult. With the article stating, "Home Depot said that moving to E.M.V. required writing tens of thousands of lines of new software code and deploying it to 85,000 new PIN pads in its stores. It said on Thursday that E.M.V. already existed in its Canadian stores but would not be introduced in its United States stores until the end of the year. Credit card companies have set an October 2015 deadline for American retailers to upgrade their payment systems."
In my opinion, even if the EMV system is better, hackers will be hackers and consumers will be consumers. In other words, no matter what measures we take, I don't 100% ever feel confident that my credit card information won't be stolen when I use it. However, as a consumer I need to consume, I want to build my credit and dollar bills are inconvenient to me, so as a result I still use my credit card fully aware of the risk. I agree that companies will start to install better security in order to protect consumer's information, however, hackers will most likely find a way around it, and consumers like me will still buy. I just plan to be more aware of my credit card activity from now on so that I can spot fraudulent activity immediately and report it.
It seems that these days technology is getting ahead in some ways and lags in others, to the point where hacking tools have become more powerful than information protection systems themselves. I see this disconnect as temporary, as systems like EMV come to the market. Though the system is currently expensive, the demand for protection is sufficient to drive up market entry and make the product more available, especially as a network good. Though initial investment will be costly, Cameron is right in saying 'consumers will be consumers', and likely we will not give up using credit cards for cash.
ReplyDeleteA possible effect of these scams could also be an increased awareness on the consumer's part to monitor online accounts more closely, which is something we should be doing anyway.
I agree with Cam and Monica that these hacks will likely not make consumer behavior change significantly. As we discussed in class, our government has regulatory bodies that oversee credit card and banking transactions, as well as a legal system that enforces contracts. Therefore consumers can continue to use their credit cards knowing that those who violate their privacy and/or steal from them will be prosecuted and their money will likely be returned.
ReplyDeleteBeth brings up valid points in her agreement to Cam and Monica. Consumers have already integrated themselves with credit cards and online banking transactions. There is this invincible sentiment until something actually happens to them. The legal system needs to alter its protection policies to help match its credit return policies. The system is already vulnerable and unprotected. Without immediate changes, more personal information will be stolen from these companies.
ReplyDeleteFrom my personal experience, there is a way to personally protect yourself from scams like this. The use of VPNs (Virtual Private Networks) can hide your IP Address which is the first step to protecting yourself. By faking your IP address to another state or country, it is less likely that a "hacker" can actually us this information to retrieve other information about you. Once one piece of information is gained, the floodgates are opened. The only things that are truly stopping you from losing your identity online are your forgotten password questions. Yes, this may sound simple, but it is the truth. If somebody can look up the answers to these questions using Google and any other pieces of information about you, they will be able to break into almost all of your internet accounts. Cyber attacks are here to stay until people learn proper internet security.