The Problem Of Using Magnetic Stripe Cards

A direct cyberattack in 2014 to JPMorgan Chase caused a compromised of accounts effecting a total of 76 million households and seven million small businesses. We are clearly, in times when consumer confidence in the digital operations of corporate America is on shaky ground. In directly, banking is taking the brunt of the fallout but major stores also have breaches which of course are directly related to their financial data. Store like, Target, Home Depot and a number of other retailers have experienced major data breaches. 40 million cardholders and 70 million others were compromised at Target alone in 2013 and an attack at Home Depot in September, 2013 affected 56 million cardholders.

In 2014, there were an estimated 2.3 million cases, a twenty-two percent increase from the previous year (Andrews, 2016). According to the Federal Trade Commission, identity theft complaints have also increased by more than 47 percent since 2014 and it was the second most reported crime after illegal debt collection. (“FTC Releases Annual Summary of Consumer Complaints Debt Collection, Identity Theft, and Imposter Scams Remain Top Categories of Complaints Received by FTC in 2015”, 2016) “The 2017 Identity Fraud Study, released by Javelin Strategy & Research, found that $16 billion was stolen from 15.4 million U.S. consumers in 2016, compared with $15.3 billion and 13.1 million victims in 2015. In the past six years identity thieves have stolen over $107 billion.” (“Identity Theft and Cybercrime”,

Identity theft is a significant problem to both citizens and financial institutions. The FTC estimates that over 27.3 million Americans have been the victims of identity theft in the past five years. The

The future of payments is current shifting to another path with how technology is changing and is currently modifying how we process our payments and how we store data. It is going away from low-tech and paper based tools, expensive and bulky registers, and physical card swipes. And it is introducing and renovating online commerce and online payment. This is happening due to the decrease of money supply and checks in the current market because people are starting to pay more and more there bills online. As the economy improces and corporations and business gets larger they have started a large-scale implementation of processors in electronic payment technology in their business ands services. Also, credit and debit are growing amongst consumers and it has been the highest that it has even been in history.

7 percent of all U.S. residents aged 16 and older were victims of identity theft, thats 17.6 million persons. Out of the 17.6 million people, about 8.6 million people had their stolen credit card info used or an attempt was made to use the info in various ways. Which is up 7.7 million victims in 2012. Females were targeted more than males (9.2 million vs. 8.3 million). By race percentages of group targeted were White ( 13,264,100, or 8%), Hispanics/Latinos ( 1,789,800, or 4.9%), Black/African American ( 1,407,700 or 4.7%). The largest age bracket hit was 50-64 year olds ( 5,061,100

According to the Bureau of Justice Statistics (BJS), almost 18 million Americans were victims of identity theft crimes in 2014. In fact, the most common kind of identity theft during this year was the attempted unauthorized use of existing financial accounts. Identity theft crimes are very serious, but there are actually different ways that criminals attempt to misrepresent their victims.

The section above traced the evolution of the banking industry’s adoption of IT based innovations with the aim of offering a suite of products and services to delight their retail and corporate customers and to gain cost reduction and market share. Whilst these developments have grown the market universe exponentially it has also created opportunities for crime syndicates and fraudsters to take advantage of the wider canvas and customer ignorance thrown up by the variety of online banking applications. According to Financial Fraud Action UK (2014), in the first six months of 2014, losses on remote banking fraud rose to £35.9 million, up 59 per cent from 2013 in the U.K. Online banking fraud comprised £29.3 million of that total, up 71 per cent from 2013. This has made the online banking service retailers sensitive to the erosion in their profits as well as the increased levels of anxiety in customers. To arrest this trend the banks are constantly endeavouring to evolve their payment and transaction rules in the hope of thwarting the criminal and fraud activity and to stay ahead. The fraudsters are never far behind as they constantly shift their focus from the well defended to less defended targets or the weakest links in the market. With time to market pressures the banks often launch new products and services without adequate safeguards or defence. Indeed, the newness of the services, and the unknowns about how

About 7% of United States has reported some sort of Identity Theft. Richer people who have over $75,000 in income each year have a 12% chance of 100% of getting affected then families with lower incomes each year. There have also been over 30 million Identities stolen since 2000. Identity Theft is only rising every day! To make it even worse, over 100 million Americans are at risk of this because of being unsecure. Identity Theft really needs to be stopped.

According to the Bureau of Justice, Identity Theft is Defined as “unauthorized use or attempted use of an existing account, unauthorized use or attempted use of personal information to open a new account, or misuse of personal information for a fraudulent purpose”. It is estimated that on average; 12.1 million US households experience identity theft annually, which it about 7% of the population. The average financial loss per incident is $5,130 and 64.1% of those reported identity thefts are solely credit card based. This equals to an annual 7.7 million people having their credit card number stolen costing them 41.3 billion dollars. Needless to say there is a major opportunity increased credit card security to

(Douglas, n.d.) Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totaling upwards of $50 billion. The site further goes on to say, on a case-by-case basis, that approximately 7% of all adults have their identities misused with each instance

It is likely that the huge number of card breaches at U.S.-based organizations over the past year represents a response by fraudsters to upcoming changes in the United States designed to make credit and debit cards more difficult and expensive to counterfeit. Non-chip cards store cardholder data on a magnetic stripe, which can be trivially copied and re-encoded onto virtually anything else with a magnetic stripe.

In 2001, there were 86,212 complaints, which jumped almost 250% to 214,905 complaints only three years later.3 Data from other government agencies and private organizations show that identity theft has been going up since 1998.3 Arguably, identity theft is one of the most rapidly increasing crimes in the United States. The issues this crime can cover involve everything from simply draining accounts of money, obtaining government documents (e.g. applying for a Social Security card with the victim’s information) to, in more drastic scenarios, committing crimes under a victim’s name.4 Naturally, the longer it takes a person to realize that they have been a victim of identity theft, the greater the loss they tend to suffer. However, evidence also suggests that the likelihood of a successful prosecution also decreases as the time it takes to discover the theft increases.5 The elderly and people with low education are usually less likely to discover the theft quickly and are less likely to actually report it once it has been discovered.5 While it is easy to associate the act of identity theft with having a wallet or purse stolen, a more in depth look into identity theft over the last decade has shown that it can cover a variety of things, as mentioned before. If anything,

A new type of credit card is starting to become more familiar in the Unites States, called a chip-and-PIN card. The chip-and-PIN cards contain an embedded security chip and a traditional magstripe. This embedded security chip ensures that the card cannot be duplicated, as it masks the payment data uniquely each transaction. The problem with this alternative is that they cost significantly more to make than traditional payment cards and most merchants do not have systems that are capable of accepting the new chip-and-PIN cards. However, in October of 2015 if you have not changed your systems to support chip-and-PIN cards, the liability of the data breach now falls on the merchant, rather than the banks.

In the old days, people go to bank branches in order to either make a deposit or a withdrawn to their accounts. From 14th century in Venice, Italy to 1970s in New York, United States, banking seems to the same as it never changes. There is no other options if you don’t want to have your own house full of cash open for thieves and robbers. But with digital currency and online banking system, those days have long gone for younger generations only with pictures shown on the history books. Starting from 1990s, growing with the boom of IT technology in Silicon Valley, digital banking has given itself a key role of shaking up the entire banking industry as

Because of this new Chip technology fraudsters are changing their techniques, as well as finding other ways to take your money out of your bank account and charge your credit card.