Sounding The Data Breach Alarm Again
Once again I’m writing about the issue of liability in financial data. Data breaches can affect more than credit cards, although the driving force is the card companies’ clamp down on fraud and identity theft. As the merchant, that is the account that is taking the payment will soon be responsible for the loss of information and fraudulent payments, as well as the theft and fraud that can be had with stolen identifying information.
As the owner of a small gym business this means you are going to need to be extra vigilant. Having the information on your computer system will shortly increase your liability where previously credit companies would have written off fraud charges by the billion.
Data Breach In The Balance
Club Industry recently published an excellent discussion of the topic on the issue of data breaches. This is very much the issue du jour as the credit card companies are working to minimize the financial and economic impact of data theft. The most common weak point is hacking attacks on the files of companies that maintain detailed customer records.
As Club Industry points out, the personal information that is at risk is social security numbers, driver license numbers and bank account details. Basically this is everything that sophisticated cyber-criminals, who could be located anywhere in the world, need to clear out the account balances of consumers. If they really get greedy they can then double-down by establishing fraudulent lines of credit based on the same stolen information.
Much of this sort of fraud and theft has, until now, fallen on the banks and credit card companies to write off but that changes as of October 2015. The Club Industry article also covers what you can do to insure against data breach. Your insurance agent will be glad to discuss the issue with you and make sure that you have enough of the right coverage.
It Is Not Just The Big Box Companies That Get Breached
The Target scandal shows that American retailers and sellers have all been whistling in the dark about the growing risks of data theft. Clearly if it can happen to a large company like Target then it can happen to any business.
The battle to protect customers and business interests against fraud and theft is like an arms race; when you increase security the bad guys find another way around, another way to get in. You try harder and they try harder and all you can really do is attempt to keep up and not be that business that slipped up and skipped a vital update or security measure. Because if everyone else is protected that makes the one who’s not the weakest member of the herd, likely to be singled out by predators.
On a personal membership level the loss of reputation can be disastrous, even if you don’t get stuck with the bill for liability. A recent report by Symantec.com found that of one in five businesses will get hit with a data breach and that almost two thirds of those that do will be out of business within a year. It’s a report worth reading and can provide a roadmap to a defense strategy for your business.
Help Gym Insight Help You
For users of Insight there are specific security features to help secure your records and as a partner with Authorize.net we can help to minimize your exposure. However, you do have to do your part as well. Using the EMV chip option on a card is always safer than just running the strip. That is a training issue that I recently discussed here on the Gym Insight Blog.
The shifting burden of liability will, no doubt, catch some retailers out in the next few months and years, leading to the inevitable media frenzy. Let’s all do our part to ensure that, when it happens, the reporters and pundits aren’t focused on some company in the fitness industry.
Bibliography
Symantec Corporation . “Internet Security Threat Report 2014.” Vol. 19. Symantic.com. April 1, 2014. https://www.symantec.com/content/en/us/enterprise/other_resources/b-istr_main_report_v19_21291018.en-us.pdf (accessed May 29, 2015).
Fagan, Lawrence. Credit Card Liability And You. May 22, 2015. https://blog.gyminsight.com/3361-credit-card-liability-and-you/ (accessed May 29, 2015).
-. Target’s Data Breach Impacts the Health Club Industry. May 19, 2014. https://blog.gyminsight.com/2675-targets-data-breach-impacts-the-health-club-industry/ (accessed May 29, 2015).
Urmston Lowe, Jennifer. Data Breaches Are Serious Exposures for Fitness Businesses. April 6, 2015. https://clubindustry.com/resourcebeat/data-breaches-are-serious-exposures-fitness-businesses (accessed May 29, 2015).