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Retailers and banks need to make the switch to safer credit and debit cards

Learn how to protect yourself if you get a data breach notice

Published: November 21, 2014 05:00 PM

When you go holiday shopping and swipe your credit card at the register, you want to know that your personal information is safe. You don’t want to have to worry about a data breach such as the ones that hit TargetHome DepotJPMorgan Chase, and other companies over the last year.

A data breach often means that someone has hacked into a store’s payment system and stolen customers’ personal information, such as their credit, debit, or prepaid card numbers, putting consumers at risk of fraud and identity theft.
At Consumers Union, the policy and advocacy arm of Consumer Reports, we are working to help stop data breaches and ensure your payment cards are secure.
First, we are pressing retailers and banks to make the switch to safer cards that use chip-and-PIN technology. Cards with chips are more secure than cards with magnetic stripes. Each chip is unique, so the card can’t be duplicated, and you have to enter a personal identification number to approve the purchase, as you would at an ATM.

Other countries that have adopted chip-and-PIN technology have seen a significant drop in fraud. While some U.S. companies are moving closer to using this technology, we want all stakeholders to step up and make the change as soon as possible.
President Obama recently signed the BuySecure Initiative executive order to improve the federal government’s payment security and speed up the transition to stronger security technologies. We think this will help push industry in the right direction.
Besides the push for safer cards, we want lawmakers and regulators to close the gaps in payment protections. Several bills have been introduced in Congress that propose national standards for data protection, including requirements for companies to promptly notify customers of breaches. But members have yet to reach a consensus on how to move forward, and when a new session of Congress begins in January, these bills will have to be reintroduced.
For now, if a store where you shopped gets hit by a data breach, protect yourself with these tips.
Keep close tabs on your accounts. If your credit, debit or prepaid card information is stolen, start checking all of your accounts carefully. Look for charges you don’t recognize. If you spot something strange, call your card issuer right away. Keep checking month to month, because some thieves will wait until they think you’ve stopped checking.
Make sure any data-breach notice you receive is real. If you get an e-mail or phone call telling you that there was a data breach, write down the information they give you, but do not volunteer any personal information of your own. Do not click on any e-mail links or press numbers on a phone call that you did not initiate. Close your e-mail or hang up the phone. Then call the bank or retailer yourself to make sure the notice was legitimate.
Consider getting new cards: If there was a breach with your payment card, you may want to get a new card with a new account number. This will keep your account from being used without your permission. If you do get a new card, make sure to change any automatic payments to your new card so that you aren’t charged for missed or late payments.
Consider a fraud alert: If you set up a fraud alert, that means that anyone who might issue a new credit card in your name would need to take extra steps to verify your identity first. But a fraud alert won’t tell you if someone is making charges to your current accounts, so you’ll need to keep watching your accounts closely. It’s free to set up a fraud alert online. It lasts 90 days, but you can renew it. You may also consider a security freeze, which means no one can view your credit report without your permission.

Consider free credit monitoring, but know the limits: Some companies may offer free credit monitoring, which is an ongoing review of your credit history by a credit bureau. Keep in mind that the service won’t tell you if someone is using your existing accounts without your permission, but it will alert you if someone opens a new account in your name.

You can learn more about our advice on what to do when you get a data breach notice at our site

This feature is part of a regular series by Consumers Union, the policy and advocacy arm of Consumer Reports. The nonprofit organization advocates for product safety, financial reform, safer food, health reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.

Read other installments of our Policy & Action feature.

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