When credit card processors fail to adequately protect customer data, data breaches and identity theft occur. This fall, they will try a new strategy for the protection of such data. Since the processors are finding it impossible to thwart every hacker, they encrypt data in these tiny segments that the fly will not be profitable for criminals. Heartland Payment Systems, which recently announced a major data breach, will be introducing the new data storage system in October, hoping that identity thieves will be deterred by the lack of easy profit.
This week, Consumerist posted an interesting interview with Evan Schuman, editor and publisher of the blog StorefrontBacktalk.com, which sheds some light on the strengths and weaknesses of this new technique. The interview also clear that, although the Heartland strategy can be somewhat effective, only a significant investment in encryption technology for credit card providers will really make our transactions by credit card safe identity thieves. Unfortunately, credit card providers do not seem particularly eager to spend money that would require.
In the meantime, the best way to prevent hackers who try to steal your credit card data and open new credit accounts in your name to make your own investment in theft protection identity or credit monitoring.