Data Breaches Become a Congressional Concern

Three hearings in Congress this week address recent data breaches at large retailers.

February 04, 2014

WASHINGTON – The recent data breaches incurred at Target, Neiman Marcus and Michaels are spurring members of Congress to address how credit and debit cards are processed and cardholder data is stored.

Yesterday, the Senate Banking Subcommittee on National Security, International Trade and Finance held a hearing on protecting consumers' data.

“Credit card companies make the cards and set the security standards. Merchants spend roughly $6.5 billion each year to help prevent fraud and protect customers but can't make up for all the vulnerabilities that fraud-prone credit and debit cards have,” said Lyle Beckwith, NACS senior vice president of government relations, on the hearing. “To best protect consumers, real security standards need to be established that aren’t based on proprietary models only the credit card companies oversee.”

Mallory Duncan, general counsel of the?National Retail Federation, testified during the hearing that it’s long past time for the U.S. to adopt PIN and chip card technology. “The PIN authenticates and protects the consumer and the merchant. The chip authenticates the card to the bank. If the goal is to reduce fraud we must, at a minimum, do both,” he said.

Today the Senate Judiciary Committee will convene a hearing on “Privacy in the Digital Age: Preventing Data Breaches and Combating Cybercrime” with testimony coming from Target, Neiman Marcus, the U.S. Secret Service and the Federal Trade Commission. A similar hearing will take place on Wednesday in the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade.

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