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October 20 2015

Private Industry Needs to Do What It Can To Protect Consumers from Fraud

Carrie L. Lukas

In the modern era, preventing crime has become more complicated.  Someone who wants to steal something rarely resorts to putting on a mask and brandishing a weapon at a shopkeeper.  Technology now offers much better ways for bad guys to protect their anonymity and steal on a much larger scale.

The good news is that technology can also help us push back against these trends and make it more difficult for people to commit theft.  This month, more stores began using credit cards with chips imbedded in them.  These types of cards have been the standard in the EU, such as where I live, in Germany.  In fact, I’ve often run in to stores that aren’t willing to accept what they see as our antiquated, unsecure magnetic cards. 

While it’s progress that America is moving toward more secure chip credit cards, much of the opportunity to really crack down on in-store fraud is being missed, because users aren’t required to also input a pin number when they use their card.  It seems strange to avoid using passcodes for credit card transactions, since Americans are used to using pin codes in many other areas of life.  We use passcodes when we withdraw money at an ATM or do banking online, and expect to have to remember passcodes even when the financial stakes are low, such as for Facebook, other social media platforms, for group document sharing, and specialty websites and educational content providers. 

Why do so many outlets require pass codes?  Because it’s a very effective way to prevent people from accessing an account or service using a false identify.  And, unsurprisingly, it works well for reducing credit cards.  In fact, countries that have adopted a pin code as well as the chip technology have witnessed a big decline in rates of credit card fraud  (such as in the UK, which saw a 70 percent reduction in credit card fraud).

Government alone can’t combat credit card fraud.  That means that private industry has to do what it can to embrace best practices and new technologies to fight back.  

 

 

 

 

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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