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By Lindsay Wise, McClatchy Washington Bureau

WASHINGTON — Recent high-profile data breaches at Target and Neiman Marcus have accelerated plans by banks and retailers to implement technologies they say will prevent hackers from stealing consumers’ account information.

Malware installed in Neiman Marcus payment terminals exposed 1.1 million debit and credit cards from July to October last year, while the Target incident compromised the personal information of more than 110 million customers in November and December.

The sophistication and scope of the recent breaches has lent increased pressure to the adoption of a new generation of microchipped debit and credit cards and a cutting-edge technique known as “tokenization” to protect online and mobile purchases.

Industry experts say the technologies will limit the volume and value of consumer data stored by retailers, who no longer will have to safeguard sensitive details such as card numbers, PINs and security codes.

“It’s not just about protecting consumers from financial loss or the system from financial loss; it’s really about maintaining trust,” said Ellen Richey, executive vice president, chief legal officer and chief enterprise risk officer for Visa Inc.

In the aftermath of the breaches, Visa and MasterCard announced the formation of a new cross-industry security working group focused on speeding up and coordinating the adoption of the new technologies.

“We were pushing that direction, but this Target event has given it the kind of urgency that it didn’t have before,” Richey said.

Banks already are starting to issue debit and credit cards embedded with microchips, also known as EMV, which stands for Europay, MasterCard and Visa. The system is widely used in Europe. More than half of all credit cards in the U.S. are expected to shift to EMV by 2016.

To encourage the transition, MasterCard, Discover, American Express and Visa have instituted a policy that a bank or merchant that hasn’t adopted chip technology by October 2015 will bear the loss if a transaction turns out to be fraudulent, Richey said.

“It’s a fairly powerful incentive,” she said.

The United States has been slow to adopt microchipping because of the high costs associated with replacing traditional magnetic-stripe cards and payment terminals, estimated at $15 billion to $30 billion.

“Because of that high cost, there were definitely folks out there who were skeptical of whether they should or shouldn’t implement it, and now because of the data breaches, that seems to be moving a whole lot faster,” said David Fortney, senior vice president for The Clearing House, the nation’s oldest banking association and payments company, which provides payment clearing and settlement services.

Consumers aren’t likely to notice changes overnight. Banks will issue the microchipped versions as old cards expire, rather than all at once.

The new chip card will have a little symbol on the front to represent the microprocessor embedded inside.

“It’s actually like a little computer, a real little computer with applications and a processor in it,” said Visa’s Richey. The microprocessor also can be placed in a mobile phone, she said.

Instead of swiping the card to pay, a shopper dips a “contact” chip card into a slot in the pay terminal at checkout.

“Contactless” chip cards will use radio signals, so the shopper has only to tap or hold a card or mobile phone close to the terminal to make a purchase.

The computer in the card produces a cryptographic message that changes with every transaction, so even if thieves steal the account number, they can’t make a counterfeit card, Richey said.

“The problem we’re having is that criminals can steal information from a merchant environment, and they can get enough information to make copies of the card,” she said. “They don’t have to have your physical card; they can make copies — and as many copies as they want — because the data is static and doesn’t change from transaction to transaction.”

Photo: StormKatt via Flickr

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  • 1.Why did Trump choose to hide certain specific files and not others at Mar-a-Lago? What were the criteria that Trump used to keep some files concealed and not others? Who selected those files? Did Trump consult or direct anyone in his selection of secret files? Trump was notorious for being too impatient to read his briefing papers, even after they had been drastically shortened and simplified. Is there the slightest evidence that he spirited these papers away so that he could consult or study them? Who besides Trump knew of the presence of the files he had concealed at Mar-a-Lago?
  • 2. Mar-a-Lago has an infamous reputation for being open to penetration even by foreign spies. In 2019, the FBI arrested a Chinese woman who had entered the property with electronic devices. She was convicted of trespassing, lying to the Secret Service, and sentenced and served eight-months in a federal prison, before being deported to China. Have other individuals with possible links to foreign intelligence operations been present at Mar-a-Lago?
  • 3. Did members of Trump's Secret Service detail have knowledge of his secret storage of the files at Mar-a-Lago? What was the relationship of the Secret Service detail to the FBI? Did the Secret Service, or any agent, disclose information about the files to the FBI?
  • 4. Trump's designated representatives to the National Archives are Kash Patel and John Solomon, co-conspirators in the investigations into Russian interference in the presidential election of 2016, the Ukraine missiles-for-political dirt scandal that led to the first impeachment in 2019, and the coup of 2020. Neither has any professional background in handling archival materials. Patel, a die-hard Trump loyalist whose last job in the administration was as chief of staff to the Acting Secretary of Defense, was supposedly involved in Trump’s “declassification” of some files. Patel has stated, “Trump declassified whole sets of materials in anticipation of leaving government that he thought the American public should have the right to read themselves."
  • The White House counsel failed to generate the paperwork to change the classification markings, but that doesn’t mean the information wasn’t declassified.” If Pat Cipollone, the White House legal counsel, did not “generate the paperwork,” was he or anyone on his staff aware at all of the declassifications? The White House Staff Secretary Derek Lyons resigned his post in December 2020. Did his successor, who held the position for a month, while Trump was consumed with plotting his coup, ever review the material found in Trump’s concealed files for declassification? Or did Patel review the material? Can Patel name any individual who properly reviewed the supposed declassification?
  • 5. Why did Trump keep his pardon of Roger Stone among his secret files? Was it somehow to maintain leverage over Stone? What would that leverage be? Would it involve Stone's role as a conduit with the Proud Boys and Oath Keepers during the coup? Or is there another pardon in Trump’s files for Stone, a secret pardon for his activities in the January 6th insurrection? Because of the sweeping nature of the pardon clause, pardons can remain undisclosed (until needed). Pardons are self-executing, require no justification and are not subject to court review beyond the fact of their timely execution. In other words, a court may verify the pardon was valid in time but has no power to review appropriateness. A pardon could even be oral but would need to be verifiable by a witness. Do the files contain secret pardons for Trump himself, members of his family, members of the Congress, and other co-conspirators?
  • 6.Was the FBI warrant obtained to block the imminent circulation or sale of information in the files to foreign powers? Does the affidavit of the informant at Mar-a-Lago, which has not been released, provide information about Trump’s monetization that required urgency in executing the warrant? Did Trump monetize information in any of the files? How? With whom? Any foreign power or entity? Was the Saudi payment from its sovereign wealth fund for the LIV Golf Tournament at Trump’s Bedminster Golf Club for a service that Trump rendered, an exchange of anything of value or information that was in the files? If it involved information in the files was it about nuclear programs? Was it about the nuclear program of Israel? How much exactly was the Saudi payment for the golf tournament? The Saudi sovereign wealth fund gave Jared Kushner and former Trump Secretary of the Treasury Steven Mnuchin $2 billion for their startup hedge fund, Affinity Partners. Do the Saudis regard that investment as partial payment for Trump’s transfer of nuclear information? Were Kushner or Mnuchin aware of the secret files at Mar-a-Lago?
  • 7.Did Trump destroy any of the files? If so, when? Did those files contain incriminating information? Did he destroy any files after he received the June subpoena?
  • 8.Were any of the secrets of our allies compromised? Has the U.S. government provided an inventory of breaches or potential breaches to our allies?
  • 9.Does the resort maintain a copying machine near the classified documents that Trump hid? Were any of the documents copied or scanned? Are Trump’s documents at Mar-a-Lago originals or copies? Were any copies shown or given to anyone?
  • 10.Trump’s lawyer Christina Bobb has revealed that a video surveillance system covers the places where Trump hid the files at Mar-a-Lago, and that the system is connected to a system at his other residences at the Bedminster Golf Club in New Jersey and Trump Tower in New York City. According to Bobb, Trump and members of his family observed the FBI search and seizure of his files at Mar-a-Lago, “actually able to see the whole thing” through their surveillance system. Who has that surveillance system recorded entering the rooms where the files were kept?

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