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Credit Card Theft

Credit card theft is experienced by many businesses and individuals. As a consumer, you are not usually held responsible for charges to a credit card that has been stolen. In some cases, however, you might have to pay $50 or whatever amount was charged, but other than that and the headache of having to get a new credit card, the cost is minimal. For businesses, though, the cost of credit card theft is astronomical. For everyone from the merchant who will not get paid because the credit card company can back out of the charge to the insurance company that has to pay out money each year for stolen merchandise to the credit card company that has to incur the cost of reissuing the card, the costs mount up along the way. When Egghead.com was hacked in late 2000, it spent numerous man hours tracking the attack; in addition, banks and credit unions paid millions of dollars to reissue credit cards (it costs a credit card issuer $2–$5 to cancel and reissue a card) and compensate workers for hours worked. Also, consumers had to check their bills to see whether their cards were stolen. In another case, an online credit card scam cost Visa USA at least $48 million last year. From this one hacker attack, millions of dollars were potentially spent and huge amounts of time were wasted. When one hacker failed to extort money from Creditcards.com, he posted about 55,000 credit card numbers on the Internet. The costs in contacting customers and replacing those cards, loss of revenue through use of those card numbers by other people, and time wasted were very high for all parties involved.

Who is to blame for credit card theft via the Internet or use of technology? Is it the consumer, who should be responsible for how he uses his cards, or is it companies for not using the correct technology to secure data, or maybe society for not putting a stop to hacker activity? This is a rhetorical question because we can't blame anyone—we can only attempt to make it difficult in the future to have credit card information stolen, especially with technology. It can be argued that a company with good security should be able to stop an attack. But security is just a point-in-time event. If you think your systems are secure today, tomorrow a brand new exploit can become known that will find a new hole in your security defenses. After an attacker does breach security defenses, it takes a lot of time and effort to track what was done to the systems and ensure that no other weaknesses were introduced to the environment by the attack, further escalating the costs of an attack.


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