PEWAUKEE, Wis., Jan. 25 /PRNewswire-USNewswire/ — Wisconsin credit unions support draft legislation introduced by State Rep. Brett Davis (R-Oregon) and State Sen. Bob Wirch (D-Pleasant Prairie) that would keep safer personal information stored on credit and debit cards.
“Due to recent breaches of consumers’ personal information involving payment cards, legislators and consumers have a heightened awareness of the extremely important matter of data security. We hope this common sense proposal will win broad bi-partisan support and be signed into law this session,” says Brett Thompson, President & CEO of The Wisconsin Credit Union League, the trade association representing 260 not-for-profit, member-owned financial institutions. “Sen. Wirch and Rep. Davis deserve much credit for their leadership in addressing this issue which, if not addressed immediately, could sharply erode consumer confidence in plastic payment cards.”
LRB 2983 is the bill draft that would prohibit merchants from retaining PINs or security codes after processing a credit or debit card transaction. If a merchant were to ignore the law and collect and keep that information and if the information were lost, the party responsible for losing the information would be required to pay for the costs to close consumers’ accounts and re-issue cards. The party responsible for the loss would also be required to pay for steps that intend to prevent any ensuing fraudulent use of a consumer’s personal information and cover certain costs enabling continued financial services to the card holder, such as notifying affected customers or crediting accounts for fraudulent transactions.
Thompson says an overwhelming majority – around 75% – of Wisconsin consumers responding to a January telephone poll conducted on behalf of The League support measures that require the party responsible for a data breach to bear such restorative costs. He says consumers may spend up to 60 hours to fix damage caused by a breach and attempts at fraud.
“To allow consumer data to live in vulnerable environments where the information might be used beyond its intended purpose is nothing short of an invitation for fraud,” Thompson says.
“This bill follows some of the payment card industry’s existing, basic rules that merchants sometimes ignore since they don’t carry the force of law or have any real consequence for those who ignore the rules,” Thompson adds. “The payment card system itself acknowledges the imprudence of storing sensitive personal information when it’s unnecessary to do so.”
He also suggests that improved data security would improve consumer confidence in spending, stimulating the economy.
Credit unions, which are member-owned cooperatives, have a more difficult time offering attractive rates on savings and loans to members when they must bear the costs related to breaches of personal information.
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Source: Wisconsin Credit Union League
