That Big Security Fix for Credit Cards Won’t Stop Fraud – KIM ZETTER 09.30.15. 8:00 AM


Tomorrow is the deadline that Visa and MasterCard have set for banks and retailers across the US to roll out a new system for more secure bank cards with microchips embedded in them.

Over the last few years, card issuers have spent between $200 million and $800 million to distribute new debit and credit cards to accountholders, while large retailers like Target, Home Depot and Walmart have spent more than $8 billion to install new card readers capable of reading the chips.

Despite this effort, retailers say the new system is highly flawed because instead of issuing the so-called chip ‘n’ PIN cards that offer two-factor authentication, banks and other card issuers are distributing chip ‘n’ signature cards, which thieves can easily undermine.

“Chip and PIN has been proven to combat fraud dramatically,” says Brian Dodge, executive vice president of the Retail Industry Leaders Association. “But that’s not what American consumers are getting, and thus far banks have gone to great lengths to blur the lines between the two distinctly different transactions.”

Even with PINs, however, the new technology will not eliminate fraud, but will simply shift the type of fraud that occurs.

The Hope of a More Secure System

The new technology—called EMV for Europay, MasterCard and Visa—consists of cards with a microchip that contains data traditionally stored in the card’s magnetic strip. These work with new point-of-sale readers that scan the chip and process payment transactions in a secure manner using encryption.

The chip reduces fraud because it contains a cryptographic key that authenticates the card as a legitimate bank card and also generates a one-time code with each transaction. This means thieves can’t simply take account numbers stolen in a breach and emboss them onto the magnetic strip of a random card, or program them onto the chip of a random chip card, to make fraudulent purchases at stores or unauthorized withdrawals at ATMs.

Article continues:

http://www.wired.com/2015/09/big-security-fix-credit-cards-wont-stop-fraud/

 

Hack attacks spur calls for cyber insurance – By Julian Hattem – 09/06/14 07:21 PM EDT


Lawmakers have been unable to pass legislation to deal with the stream of hacks at major stores and websites, but the government may be able to do some good by helping out the insurance market.

Screen Shot 2014-09-07 at Sep 7, 2014 3.00

Analysts and brokers say the federal government should do more to help bolster the market for cybersecurity insurance, which would lead to stronger networks and make people’s data harder to steal.

Cybersecurity worries are growing following the theft of celebrities’ nude photos, a hack at Home Depot that may have exposed tens of millions of people’s credit card information and a breach of HealthCare.gov. Industry supporters hope the time is right for the country to take a new look at their offerings.

“These are unfortunate events but they of course increase awareness and one of the natural questions that come out of that increased awareness is what can I do to insure against this type of event if it happens to my company?” said Matt McCabe, a senior vice president for network security and privacy at Marsh, a major insurance broker.

Article continues:

Read more: http://thehill.com/policy/technology/216840-hack-attacks-spur-calls-for-cyber-insurance#ixzz3Ccethbli  Follow us: @thehill on Twitter | TheHill on Facebook

Why the rich are freaking out – By BEN WHITE | 1/30/14 5:02 AM EST


Hundred dollar bills are pictured. | AP Photo

The nation’s wealthiest 1 percent appear to be having a collective meltdown. | AP Photo

NEW YORK — The co-founder of one the nation’s oldest venture capital firms fears a possible genocide against the wealthy. Residents of Manhattan’s tony Upper East Side say the progressive mayor didn’t plow their streets as a form of frosty revenge. And the co-founder of Home Depot recently warned the Pope to pipe down about economic inequality.

The nation’s wealthiest, denizens of the loftiest slice of the 1 percent, appear to be having a collective meltdown.

Economists, advisers to the wealthy and the wealthy themselves describe a deep-seated anxiety that the national — and even global — mood is turning against the super-rich in ways that ultimately could prove dangerous and hard to control.

(Also on POLITICO: Full finance policy coverage)

President Barack Obama and the Democrats have pivoted to income inequality ahead of the midterm elections. Pope Francis has strongly warned against the dangers of wealth concentration. And all of this follows the rise of the Occupy movement in 2011 and a bout of bank-bashing populism in the tea party.

The collective result, according to one member of the 1 percent, is a fear that the rich are in deep, deep trouble. Maybe not today but soon.

“You have a bunch of people who see conspiracies everywhere and believe that this inequality issue will quickly turn into serious class warfare,” said this person, who asked not to be identified by name so as not to anger any wealthy friends. “They don’t believe inequality is bad and believe the only way to deal with it is to allow entrepreneurs to have even fewer shackles.”

And so the rich are lashing out.

In the latest example, Thomas Perkins, co-founder of legendary Silicon Valley venture capital firm Kleiner Perkins, wrote a letter to The Wall Street Journal over the weekend comparing Nazi Germany’s persecution and mass murder of Jews to “the progressive war on the American one percent, namely the ‘rich.’”

(Sign up for POLITICO’s Morning Money tip sheet)

He went on to say he feared a progressive “Kristallnacht,” referring to the 1938 German pogrom in which nearly 100 Jews were killed and more than 30,000 arrested, a dark omen of the murder of 6 million that would follow.

People, to put it mildly, went nuts.

Article continues:

Read more: http://www.politico.com/story/2014/01/wealthy-top-one-percent-economy-finance-102833.html#ixzz2rsdxeXrj