State Senator Marty Golden, citing a rise in credit card fraud in his district and beyond, is touting legislation he co-sponsored last month that would require credit card companies to install smart chip technology in every card issued to a New York State resident.
Golden held a press conference in Bay Ridge on Friday to advocate for the legislation, saying that merchants in his district have reported a spate of credit and debit card fraud, as well as “hackers” who have stolen data from local businesses. He was joined by Third Avenue Merchants Association President Robert Howe as well as Dimitri Akhrin, president of the Bank Associates Merchant Services.
“This legislation would require smart chip technology to be incorporated in our debit and credit cards to help protect against identity theft. Over the past few weeks, my district has been targeted by hackers who have been able to break through the security walls of some local stores. The false charges reported to my office have been made in Brooklyn, Long Island, Connecticut and event [sic] Puerto Rico,” said Senator Golden in a press release.
The senator cited Bureau of Justice Statistics reports estimating that 16.6 million people have suffered from identity theft in 2012 to 2013, 15.3 million of whom had an incident involving a debit or credit card.
According to tech site NerdWallet, manufacturers and advocates say smart chips are a safer alternative to magnetic stripe cards. Smart chips store encrypted account information and cannot be read by swiping. Instead they’re scanned into a terminal that reads the chip and can require a pin number to decrypt the chip’s information. They are not susceptible to common data scamming techniques as are magnetic strips, such as swiping, which allows fraudsters doubling as waiters or cashiers to discreetly pass your card through a handheld device that stores the card’s data.
Smart chips do have their own vulnerabilities, but the website notes that implementation in Europe has seen dramatic decreases in fraud.
The bill, which can be read here, was introduced on February 14 by upstate Senator Joseph Griffo with Golden as a co-sponsor. The Assembly version was co-sponsored by Assemblyman Alec Brook-Krasny.
American companies have been slow to adopt the technology because of the cost of replacing existing systems, including in-store point-of-sale systems and ATMs. The legislation does not address who will foot the bill, suggesting the business-owners will have to invest in new hardware if the law passes.