Recent breaches in online security at Target and Neiman Marcus have sparked discussion about a national standard for notifying consumers when their personal information may have been stolen. U.S. Attorney General Eric Holder said Americans would be able to better protect themselves if they were made aware of security breaches as soon as possible. Holder added that prompt notification would also help law enforcement to better investigate the crimes.
In past month the National Retail Federation sent a letter to Congress pushing for a nationwide standard to be developed for notifying consumers of fraud. The federation has been making that same push for about 10 years.
There are roadblocks to developing a national standard: according to Reuters, dozens of states already have their own standards in place. And in the past, there has been a struggle to get state authorities, retailers and consumer advocates to agree on one set of rules. Some state attorneys general also have expressed concern that federal standards would take away some of their ability to pursue criminals.
Retailers and banks can take other steps to better protect consumer information. Both Target and Neiman Marcus are pushing banks to issue chip and pin credit and debit cards, which feature an embedded chip that makes them difficult to copy. The cards are used in Europe, where there is far less fraud.
Chip and pin cards are not widely used in the U.S, however. It's estimated that less than 2 percent of American credit and debit cardholders are using that technology. And banks may find that moving consumers to the new cards is expensive, according to research by Time Magazine.