Credit Card Thieves Charged

Over the next few years, I expect credit card companies to pay more attention to fraud, mainly due to two reasons

One of the major IT news over the last few days was the indictment of three men. DOJ accused them of stealing hundreds of millions of credit card numbers.  One of the people involved has already been charged in other similar cases. From Reuters:

A year ago, Gonzalez was indicted along with 10 others from five countries on accusations of stealing 41 million credit and debit card numbers from major retailers, including TJX Cos. Inc. (TJX.N), owner of the TJ Maxx and Marshall’s retail chains. Prosecutors said that ring caused more than $400 million in damages.

No wonder PCI is getting more and more stringent by each version. At this speed, it does not take much time to gain hold of practically all credit card numbers in the United States.

Over the next few years, I expect credit card companies to pay more attention to fraud, mainly due to two reasons:

1.    More criminals will attempt to profit from stealing credit card numbers. It is still relatively new, and has a lot of potentials to grow.  Most companies are still not paying attentions to security related issues. This indicates a) they have not been hit yet, and b) they are easy targets from identity thieves.

2.    The deterioration of U.S. economy will cause more credit losses down the road. At very minimum, credit card companies will not pushing their businesses to the limit as they did in the last few years (any human who can breathe air can get a plastic card).  This implies lower revenue and profit. One way for banks to make up the losses is to cut down fraud related costs. This is especially true when banks do not have to shoulder the costs of implementing security measures (PCI adds little overhead to banks).