New Castle News

December 31, 2013

Our Opinion: Having trust in credit

Target hacking incident creates consumer concerns

By Staff
New Castle News

NEW CASTLE — When computer hackers steal large quantities of credit card information, what’s the economic impact?

Take, for instance, recent reports that credit and debit card information held by the Target store chain was hacked. About 40 million customers had the security of their cards compromised as a result.

On the plus side, customers whose cards were stolen won’t have to pay if someone uses their numbers. Credit card holders are protected in these circumstances.

However, Target customers must now go through the hassle of canceling cards and getting new ones. Plus, they will have to make an effort to determine if they used their cards at Target during the time frame covered by the hacking incident.

Target responded to the bad news — which erupted late in the Christmas shopping season — with an offer of 10 percent discounts on all merchandise. That may satisfy some customers, but others may be leery of shopping at Target.

Of course, this is not the first time a business has been hacked and vast amounts of credit card information stolen. Perhaps people get used to such reports, and because they don’t lose money directly, any inconvenience is deemed tolerable.

Still, such hacking costs everyone. The losses associated with any thefts, ranging from stolen merchandise to the paperwork necessary to clean up the mess, isn’t handled by waving a magic wand. In one way or another, the tab finds its way to consumers.

We suppose these hacking incidents provide a case for making store purchases with cash. Yet the success of credit cards stems in large part from the convenience they offer. Let’s face it; they aren’t going away.

So are mass hackings every now and then going to become part of the cost of doing business with credit cards? Are there things companies can — and should — do to beef up their corporate security?

Some government officials are demanding action to better protect credit card holders. But we would think businesses — especially large corporations such as Target — have plenty of incentive to do this on their own without government directive. After all, if shopping at Target is seen as a risk, consumers have other options.

In a larger sense, the Target hacking incident is a reminder of how much of the world’s economy — and entire social structure for that matter — is dependent upon trust. If individuals lack confidence that their information is safe with a particular company, they will go elsewhere. If they think the credit card system as a whole is not secure, they are far less likely to use their cards.

Maintaining trust is good business all around.