Accounting 12 - Chapter 14 Blog

http://news.bbc.co.uk/1/hi/business/2774477.stm

Five million Visa and MasterCard credit card account information have been hacked. Two companies said that none of the accounts have been used in a fraudulent way so far, But UK businesses warn credit card users that there can still be a potential risk, if the cards weren't reissued. Visa and MasterCard, both have a Zero-Liability policy, which states that "they will protect card holders from having to pay for any unauthorised or fraudulent charges." Peter Lilley, from the UK chartered institute of banking and also the author of various books on hacking and computer crime, said that some hackers just break into security systems just to prove a point and that being that the system is flawed. He also said that even thought the hackers aren’t doing anything with the credit card accounts, the accounts still are in danger now and the future. The only way to fix this problem would be to reissue all five million cards. When asked, the spokesperson for Visa could not respond to the issue of reissuing all the cards, but the spokesman for MasterCard said that it would be up to the card issuer to decide if they would want to renew the cards.

Credit cards are basically virtually money. You use it and then you pay it off with actually cash later. The first step in using a credit card is to actually do a transaction. Then the clerk would write the sale off as a credit card slip. The clerk would also check the customer’s identification number and make sure they sign the sales slip. In a couple of weeks a price list of what you owe to the credit card companies will come in the mail and the person would pay it off. But what if someone hacked the credit card companies and obtained the information. Then he or she would be able to buy an infinite amount of anything he or she desires. Even though you need identification to purchase anything, people now can buy things only without ID. Without a proper security system any information could be obtained. This is especially important for banks, because they deal with people’s money.

Five million cards obtained through illegal means and the criminals never caught, proves that the security system thought some banks are insecure in some way. Chapter 14 states that banks are responsible for the safekeeping of money and the processing of bank credit card transactions. How can the banks do that if any average joe can bypass the banks security. The banks have the duty to protect the money of people who put and invest into the bank. In my opinion, banks should invest even more heavily into security. I know that every once and a while there will be a notorious hacker than will break the security system, but banks should still focus on their security the most. If the banks security is easily bypassed than no one would even consider that bank and therefore they will not make any profit.