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First Target, then Neiman Marcus, then Michaels…who is next? What is industry doing to guard against hacking and the theft of our personal information?

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When the Target security breach was first announced, it took a while for the magnitude of the damage to be realized. Then other retailers announced security breaches, and then Target revised its estimated number of customers whose information was hacked to approximately 110 million, and…American businesses and consumers woke up to the harsh reality of the new world order: security breaches are going to be an ongoing serious threat.

How exactly do these breaches occur and why can’t they be stopped with all the sophisticated technology we have? Your Denver Personal Injury Attorney notes that the breaches typically occur by malicious software, or “malware,” penetrating point-of-sale systems, “POS.” A POS system is, for example, a swiping machine, which is connected to a company’s computer network, typically through the Internet. Because a POS system is typically connected to a company’s whole network, once it has been breached, all information in the network is accessed. In other words, not just credit and debit information is hacked; personally identifiable information (“PII”) is stolen as well. PII can include names, mailing addresses, phone mail, or email addresses. PII theft can lead to identity theft, which is far worse than credit/debit theft; cardholders are protected against unauthorized charges and can get new cards. There is no easy remedy for identity theft.

What can be done to protect the credit/debit and personal information of Americans? The Data Security Act, introduced in Congress last month, is a bipartisan effort to push banks, retailers, and government agencies into an industry-wide reform. The act, if passed, would require that when a breach affects more than 5,000 consumers, law enforcement and federal agencies would have to be notified. It also states that whenever there is a risk of a breach, the entity must notify people; Target did not notify people of the hacking until a reporter broke the story.

Your Denver Personal Injury Attorney suggests that an obvious part of industry-wide reform is to convert to “smart cards” for credit and debit cards. Smart cards do not have a magnetic strip, which is notoriously easy to hack. Smart cards have microchips and required PIN authentication. President and CEO of the National Retail Federation sent a letter to Congress lobbying for the use of smart cards and asking financial institutions who issue credit cards to get behind the idea domestically as much as they are international. Smart cards have been in use in Europe for years. Although they would not stop all hacking at POS systems, they are a great step in the right direction. Conversion costs would be high, but security breach costs are higher, as Target is finding out.

Protecting Yourself from Identity Theft 

What can individuals do to protect themselves from security breaches and identity theft? Signing up for a credit protection service is a good idea. Using credit cards only from national banks is also good protection. Finally, do not use debit cards, which do not have the protections that are associated with credit cards, and which are an easy way to access your account.

Security breaches are a fact of life in this digital age. The challenge is keeping the security technology ahead of the malware, and protecting yourself and your information. If you have been a victim of a security breach or of identity theft, contact your Denver personal injury attorney at Levine Law today.