Gridlock In Action: Retailers Demand New Regulations To Protect Consumers

chicksdaddy writes: How bad is the gridlock in Washington D.C.? So bad that the nation's retailers are calling for federal legislation on cyber security and data protection to protect consumer information — even though they would bear the brunt of whatever legislation is passed. The Security Ledger notes that groups representing many of the nation's retailers sent a letter (PDF) to Congressional leaders last week urging them to pass federal data protection legislation that sets clear rules for businesses serving consumers.

"The recent spate of news stories about data security incidents raises concerns for all American consumers and for the businesses with which they frequently interact," the letter reads. "A single federal law applying to all breached entities would ensure clear, concise and consistent notices to all affected consumers regardless of where they live or where the breach occurs."

Retailers would likely bear the brunt of a new federal data protection law. The motivation for pushing for one anyway may be simplicity. Currently, there are 47 different state-based security breach notification laws, as well as laws in the District of Columbia and Guam. There is broad, bi-partisan agreement on the need for a data breach and consumer protection law. However, small differences of opinion on its scope and provisions, exacerbated by political gridlock in Congress since 2010 have combined to stay the federal government's hand. Meanwhile, reader schwit1 points out that banks are now starting to demand that retailers pay for all the financial damage their security breaches cause.

Comments

Retailers can improve security in one big way

[Applehu Akbar]

Just turn NFC back on while you wait for CurrentC to get off the ground and be tested sometime next year. It's already on your registers, and some of the NFC vendors have high-grade security that sharply reduces the risk of credit card breaches.

Lenders are the culprits.

[140Mandak262Jamuna]

Data breach and identity theft etc would not be a serious issue if the lenders exercised due diligence before extending credit to make sure the borrower's credentials are correct. They make sure it is impossible for ordinary person to lock up the credit reports and credit to make sure no unauthorized accounts are opened unbeknownst to them.

If we make the lenders liable for all the damage caused by them. We don't even need any new laws for this. The lender has all the right to be very lax and extend credit to any Tom Dick or Harry. But if they are going to report to credit reporting agencies about default or missed payments, they have to prove that the credit was extended to the correct person. If they mistakenly report missed payments on the victim of identity thefts, the banks should be fully liable for all the damage caused to the innocent party.

The banks are the worst. They extend credit without checking. They destroyed the cheap Point-of-sale pin encoded debit/ATM transactions by conflating it with credit transactions. Merchants who used to pay a flat fees of 25 cents or so per transactions are being saddled with 2%.

The financial sector has gone from less than 5% of S&P500 index to 15% of the index. From all the economic activity going on in the country the banks rake in more than 50% of the profits. Companies that take the risk and actually make products make much less money than the the banks.

The banks have grown too big to fail, too big to jail.

All the talk about government must be small misses a crucial point. The moment the government becomes smaller than the most powerful person, that person would drown the government in a bath tub. The courts have ruled corporations are people. Now corporations are actively drowning the government in a bathtub. The banks are at the forefront. If we don't realize and and reign in the banks, we are doomed.