January 05, 2014

Berger points to 'breathtaking' hypocrisy from NRF

Jan. 6, 2014 – The National Retail Federation is appealing a settlement that requires Visa and MasterCard to pay $5.7 billion to merchants over claims of price fixing on credit card interchange fees even as some 40 million card users stand exposed in the most recent merchant data breach.

Credit and debit card interchange fees cover the costs of facilitating card transactions and help defray some of the costs of fraud when breaches occur. Credit unions and other financial institutions are working right now to help their members and customers replace credit cards that were exposed in the Target Corporation breach, which is already under scrutiny by federal investigators and is likely to come up in the near future in Senate hearings.

"The hypocrisy of the NRF's appeal on the heels of the Target data breach is breathtaking," said NAFCU President and CEO Dan Berger. "The NRF and big-box retailers want the benefits and consumer draw of electronic payments without the cost, and without the accountability. Meanwhile, credit unions and banks across the country are putting their staff and financial resources into cleaning up the mess created by this huge breach of consumer credit card data.

"This contrast should not be lost on the NRF, and we hope it won't be lost on Congress. NAFCU will continue to press lawmakers for legislation that requires merchants and retailers to adhere to minimum standards for protecting the consumer data they collect and store, to disclose when a breach occurs and to pay the costs when breaches arise from their failure to take adequate security measures."

NAFCU was the first financial services trade group to call on Congress to hold merchants responsible for data security breaches, and Berger has kept up that call in recent letters to all members of the House and Senate.

One credit union – Alabama State Employees CU – has filed a class action suit of its own against Target over this breach.

NAFCU encourages its member credit unions to reach out to their members and alert them that they should monitor their accounts for fraudulent or unauthorized activity.