Banking Industry Says It Should Not Be Blamed for Data Breaches at Retailers

ICBA responds to the NRF's accusations

On Monday, the National Retail Federation (NRF) sent out a letter to US Senator Harry Reid and the Speaker of the House of Representatives John Boehner regarding the recent data breaches suffered by Target, Neiman Marcus and other retailers.

The NRF says the the retail industry is eager to work with banks and payment card companies in an effort to reduce fraud and fight against cyberattacks. However, the organization blames the banking industry for the recent data breaches.

The NRF believes that the card industry should start adopting “PIN and Chip” security measures in the United States.

“As long as bank cards continue to be issued with outdated and fraud-prone magnetic stripe (and signature) security, it is clear American card holders will remain largely unprotected,” the letter reads.

In response to these accusations, the Independent Community Bankers of America (ICBA) has released a statement of its own.

“The NRF should focus its attention on responding to the harm that security breaches at several retailers have done to consumers and their financial institutions rather than hurling false allegations blaming the banking industry for these retail breaches,” said ICBA President and CEO Camden R. Fine.

“Retailers and their processors—not banks—are responsible for the systems in their stores that process payment cards. ICBA hopes that the massive retail security breaches at Target, Neiman Marcus and others will spur retailers to adopt security solutions going forward.”

Fine highlights the fact that almost all of the recent breaches suffered by retailers were possible because the targeted companies violated industry security agreement. Furthermore, some of them failed to deploy technology to alert them of breaches, leaving the task to third parties, such as banks.

“Further, even card security controls such as chip and PIN technology would not have prevented the breach of personal information of more than 70 million U.S. consumers. Retailers must step up to the responsibility that comes with handling personal information of consumers,” he added.


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