Featured Savings Rates

Citi Data Theft Points Up A Nagging Problem

Stewie   |     |   73 posts since 2010

Citi Data Theft Points Up a Nagging Problem - Yahoo! Finance=

Big credit card lenders are loath to acknowledge another reason that the breaches keep happening: they are in the business of reducing the financial losses stemming from fraud, not preventing data theft in the first place. As a result, analysts say, they have devoted the bulk of their resources to trying to stop fraudulent transactions from occurring.

Merchant advocates, meanwhile, say the banks have little incentive to reduce it more because, in some cases, it can be a source of income. Not only do they take in hefty charge-back fees from merchants — sometimes $25 or more for each fraudulent purchase — but in many cases retailers must swallow the cost of the item fraudulently purchased.

No wonder there seem to be so many data breaches lately!