Groups Appeal to Pres. Obama on Data Security Responsibility
As reported in trade media, three retail groups wrote to President Obama in response to a letter recently sent to the President by the National Association of Federal Credit Unions (NAFCU). The NAFCU letter called for requiring retailers to keep the same high standards for data security and breach notification as those are imposed on the financial industry. The National Grocers Association, National Restaurant Association and National Association of Convenience Stores argued that bank-issued credit and debit cards are prone to fraud, calling for a PIN requirement on all card transactions to reduce fraud risk.
The retailers’ letter accused banks and credit unions of using retailers as a scapegoat and seeking higher fees for non-PIN transactions rather than protecting consumers’ data security. According to the retail groups, only 11 percent of the 1,367 data breach incidents affected retailers, compared to 34 percent for financial institutions. The NAFCU originally argued that no federal standards exist for merchants regarding data security and data breach notification, which ultimately hurts consumers and small financial institutions, such as credit unions.
The letters are the latest salvo between merchants and financial institutions in the ongoing struggle of how to share the costs arising from the increasing incidents of data breach, as well as which group should be responsible for preventing future breaches.
The text of the letters is not yet available.
