WASHINGTON -- President Barack Obama signed an executive order on October 17 directing the federal government to "lead by example" in securing transactions and sensitive data. The new BuySecure Initiative institutes the use of both microchip and PIN technology in government-issued credit and debit cards. Retail groups applauded the move.
BuySecure will provide consumers with more tools to secure their financial future by assisting victims of identity theft, improving the government's payment security as a customer and a provider and accelerating the transition to stronger security technologies and the development of next-generation payment security tools.
"We've all experienced the benefits of new technologies that let us buy and sell things faster and more efficiently than ever before. But there are risks that come with these technologies as well," Obama said, addressing the Consumer Financial Protection Bureau (CFPB). "Last year, millions of Americans became victims of identity theft. Millions were victims of this kind of fraud. More than 100 million Americans had information that was compromised in data breaches in some of our largest companies. And identity theft is now America's fastest-growing crime."
He continued, "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 in the wrong time, that's infuriating. For victims, it's heartbreaking. And as a country, we've got to do more to stop it.
"And that's why today we are launching an initiative called "BuySecure"--because you should be able to buy the things that you need without risking your identity, your credit score or your savings.
"First, starting next year, we're going to begin making sure that credit cards and credit-card readers issued by the United States government come equipped with two new layers of protection: a microchip in the card that's harder for thieves to clone than a magnetic strip, and a pin number you enter into the reader just as you do with an ATM. We know this technology works. When Britain switched to a chip-and-pin system, they cut fraud in stores by 70%.
"Of course, no one security measure, no matter how powerful, can stop fraud on its own. So today, I'm also directing federal law enforcement to share more information with the private sector when they discover identity theft rings."
He also said that the Federal Trade Commission (FTC) "will add new features to IdentityTheft.gov, and they're going to work with credit bureaus to dramatically cut down on the time it takes for victims to recover their stolen identities. And in the coming months, I'll be bringing together industry leaders and consumer advocates for a cybersecurity summit focused on protecting consumers using the next generation of mobile payment systems and devices."
He announced that "a group of retailers that include some of our largest--Home Depot, Target, Walgreens, Walmart--and representing more than 15,000 stores across the country, all of them are pledging to adopt chip-and-pin technology by the beginning of next year. American Express is pledging $10 million to replace outdated card readers at small businesses. MasterCard is pledging to provide its customers with free identity-theft monitoring and resolution support. And Citi is joining other financial institutions in making free FICO scores available to customers, because a sudden drop in your credit rating is one of the clearest signs that you've been hit by fraud."
The President concluded the signing ceremony by saying that his credit card was declined recently in a New York restaurant. "I guess I don't use it enough," he said. "So they thought there was some fraud going on. Fortunately, Michelle had hers. And I was trying to explain to the waitress, no, I really think that I've been paying my bills. Even I'm affected by this."
Watch the video, or click here to read the full remarks. And click here to view the full text of the executive order. Also, click here to view a fact sheet on safeguarding consumers' financial security.
The National Association of Convenience Stores (NACS), on behalf of the more than 151,000 convenience stores nationwide, said it applauds President Obama's announcement this morning of the new BuySecure Initiative instituting the use of both microchip and PIN technology.
"NACS has been working for many years to promote the use of PIN technology, which has been successfully employed in Europe for years, resulting in dramatic reductions in fraud to the benefit of merchants and consumers alike," said Lyle Beckwith, NACS senior vice president of government relations.
"PIN technology is the surest and simplest way to ensure card security. Even without the use of chip, requiring a four-digit PIN number on all credit card transactions would immediately eliminate the vast majority of card fraud. We agree with the president that this collaborative initiative has the potential to be a premier example of government leadership in driving positive change, in particular to accelerate the widespread adoption of next-generation payment security tools. NACS will redouble its own efforts to work with the administration, Congress and the industry to make the establishment of the highest possible protections for businesses and consumers in the very near future," Beckwith said.
The National Retail Federation (NRF), National Grocers Association (NGA) and other retail groups also praised the move.
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