State lawmakers to hear measure aimed at reducing card fraud - Hawaii News Now - KGMB and KHNL

State lawmakers to hear measure aimed at reducing credit card fraud

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HONOLULU (HawaiiNewsNow) -

A measure aimed at reducing the threat of identity theft and credit card fraud goes before three state senate committees Monday.  

House Concurrent Resolution 32 urges Congress, financial institutions and businesses to move away from current credit card technology -- which uses a magnetic strip on the back of the card to store date -- to newer methods to reduce identity theft.

The state Office of Consumer Protection said in the last seven years, at least 228,250 Hawaii residents, or 16 percent of Hawaii consumers, have been the victim of a data breach. The resolution is aimed at reducing those numbers by urging the use of computer chips to store data on credit cards, rather than the magnetic strip.

"What we're trying to do is align ourselves with countries in Asia and Europe that have already started using this new technology," said state Rep. Mark Takai (D-Aiea), one of the sponsors of the resolution.

The measure comes in the wake of last year's security breach at Target, which affected more than 121,000 Hawaii residents. Supporters of the resolution say it is a needed measure.

"We're trying to move this effort at the federal level and make it more global, but the fact is there are many people, even in Hawaii, that are being affected by identity theft and the theft of credit card numbers," said Takai.

But the Hawaii Bankers Association doesn't think a measure is really needed, at least at the state level.

"We certainly agree with the intent of the resolution, but Congress is in fact acting on this measure," said association Executive Director Edward Pei. "There's a bill in the Senate and a comparable bill in the House."

Pei also said Visa and MasterCard are already encouraging all card-issuing banks and merchants to be ready for computer chip cards by October of next year. "I don't think that the entire community wilt be ready by then, but we will have made significant progress by then."

Those cards will also cost much more to make, and there will also be a cost to retailers to switch to technology to read those cards.

"There are costs involved. But I think the cost to not do this far outweighs any costs that we'll have to put in," said Takai.

And whether or not the measure passes in the legislature, it seems those cards will be headed to your purse or wallet in the very near future.

"The chip card is something that is inevitable for the entire world," said Pei.

House Concurrent Resolution 32 goes before the senate Committees on Technology, Commerce Public Safety Monday at 9:45 a.m. in Conference Room 414 at the State Capitol.

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