More on Hacker's 11

There's been a lot of press relating to the 40 million card breach and the subsequent arrest of the Hacker's 11. In fact, I've done several posts on it myself.

It was all done by something called "wardriving," (see WarDriving 101) which involves driving through areas with a laptop searching for accessible wireless Internet signals, and then tapping into those systems to install "sniffer programs" that capture credit and debit card numbers as they move through a retailer's processing networks.

Perhaps the worst part of this is that nothing can be done to prevent it from happening again. Members of the international stolen credit and debit card ring, which included some U.S. citizens, were locked up -- but you can't lock up a technique. As long as there's WEP, there's theft.

As I mentioned yesterday, the financial community is heavily regulated (see yesterday's post "PCI, PCIDSS 101) to protect consumers' data, which is encrypted by law and industry agreement. No one "purposefully" shortcuts that process. But the crooks found a way to insert a data sniffer into the system so that by the time cards were swiped and the information was released from the point-of-sale device, the information already had been snagged.

The industry will devise a solution. But in what amounts to a digital arms race, criminals will figure out a way around it. The Center for Democracy and Technology advises consumers that, as more and more of their lives are processed online, they must take more responsibility as they are handing over personal and financial information.

Editor's Note: I personally, think the solution lies in "NOT handing it over at all" but instead, using HomeATM's Personal PIN Pad for online purchases. The fact is: Anytime you type in your credit/debit card number a consumer is ripe for hacking. Myriad methods to do it, and more and more on the way every day. Maybe we can get the environmentalists to go after the keyloggers or at least have the owls spot them... Seriously, though, entering your credit card information via a keyboard on a PC is asking for trouble. This is why I have spent a lot of time trying to make the case for a personal PIN Entry Device. (See Reverse Matriculation, Bring the Device Home)

HomeATM is working vigilantly on creating and putting forth a program that will get their Personal PIN Entry Device into the hands of as many consumers as possible. We believe it won't be long before that happens and millions of consumers have one. However, in the meantime, if you absolutely feel the need to purchase something online, keep these two rules of thumb at the forefront of your awareness:

1. When typing in a credit card number, make sure the web page is secured (more secured), as indicated in the URL as https -- the "s" standing for "secure."

2. Do not enter your financial or personal information while using a wireless network. Someone could be sitting outside of Starbucks with a program that is sniffing the information typed into your keyboard and stealing that (and your buck$) right out of thin air.

Those crooks thank their lucky stars that your bucks don't stop there... thank yours that it won't be long before you can be the proud owner of your own personal HomeATM!

75% of "Online" American's Use eBilling Services

CheckFree released the results of an annual Consumer Banking and Bill Payment Survey that they sponsor and according to their release, "more Americans than ever, an estimated 63.1 million households or three-fourth's of those online, are paying their bills online rather than writing paper checks.

The Consumer Banking and Bill Payment survey has been conducted annually since 2002 by CheckFree Consumer Insights, a consumer research and data analytics unit of Fiserv focused on tracking the latest online banking, billing and payment trends. What follows is additional information – including charts, survey findings and a complimentary prerecorded webinar – about the 2008 Consumer Banking and Bill Payment Survey.

Additional Survey Findings

Among younger respondents under age 45, 57 percent considered the environment as an important reason why they use online billing and payment, compared to 44 percent among those in the 45-and-older age group.

Fifty-five percent of those living in the Western United States cited environmental concerns as a key motivation for online bill payment adoption versus 49 percent for other regions.

Major credit cards (48 percent) were the most frequently cited e-bills received and paid at online banking sites, followed by cable or satellite television (42 percent), cellular phone (41 percent), electricity (38 percent) and local telephone (34 percent).

Fifty-four percent of respondents who were aware their online banking site offers e-bills said they receive at least one e-bill, while 46 percent do not. The most appealing features of e-bills were due-date reminders, convenience and assurance that bills are never paid late.

E-bill recipients were 45 percent more likely to report being extremely satisfied with their bank or credit union than non-e-bill users. Fully half of e-bill recipients said their experiences with e-bill had made them less likely to switch financial institutions in the future. E-bills are electronic representations of paper bills that are securely delivered directly to a business or financial institution Web site. With e-Bills, consumers can review balances, transactions and all other details available in paper bills, and schedule payments with just a few clicks of the mouse.

Overall, 67.9 million households, or 80 percent of the estimated 85.1 million U.S. online households, use online banking services, up from 63.4 million in the 2007 survey. [See Chart: Consumers’ Online Banking Usage Mirrors Internet and Broadband Trends.]

Those living in Western (83 percent penetration) and Southern (81 percent penetration) states were more likely to adopt online banking than those in the Northeast (78 percent) and Midwest (78 percent).

Respondents identified 24/7 access to account balances, time savings and better organization of their finances as the most important benefits of conducting banking activities online.

Watch Recorded Webinar

In this complimentary webinar, "Consumer Billing and Payment Trends," senior researchers from CheckFree Consumer Insights discuss compelling findings from this year's Consumer Banking and Bill Pay Survey and David Baron, vice president of Financial Research Services for Harris Interactive, provides insights into what made the survey successful.

>> Watch Webinar