New Executive Order Protects Consumers From Credit Card Fraud

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In response to data breaches against American banks, retailers, and food chains, President Barack Obama signed an executive order to protect consumers by tightening security for federal credit cards.

Obama signed the order in front of an excited crowd at the Consumer Financial Protection Bureau, an agency created in 2010 by Dodd-Frank Wall Street reform law to protect consumers.

The executive order will implement new security measures, such as installing microchips in government credit and debit cards instead of the magnetic strips, which are easier to exploit.

“The idea that somebody halfway around the world could run up thousands of dollars in charges in your name just because they stole your number or because you swiped your card at the wrong place at the wrong time – that’s infuriating,” Obama said at the conference. “For victims it’s heartbreaking. And as a country we’ve got to do more to stop it.”

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The administration hopes that the order will be a starting point for Congress to pass national standards for how to handle financial breaches.

It’s essential to make sure “that the American people have the basic safeguards that they can count on,” Obama said at the signing.

Already, companies such as Home Depot, Target, Walgreen, and Wal-Mart have agreed to make their stores compatible for the new cards, adding secure chip card terminals to their checkout aisles by next year.

American Express will also implement a $10 million program to assist small businesses in updating their terminals to read the microchip cards. Visa will use its resources to create educational programs to inform consumers about these new technologies. Additionally, Citi Cards will make personal credit scores readily available thanks to a partnership with FICO.

 

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