Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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October 17, 2022
Webinars Address ATM Crimes, Financial Exploitation
ATM attacks don't generally appear in the news, despite their growing threat. As we've written before, these attacks can be both cyber and physical, and the physical attacks can be against both machine and the personnel servicing the machine. Another disturbing crime that may not appear enough in the headlines is the financial exploitation of senior adults. Two upcoming events in our Talk About Payments webinar series will give you the opportunity to learn more about these issues from the experts. The first, on November 3, covers ATM attacks. The second webinar takes place the following week, on November 10, and addresses the exploitation of seniors and community-based approaches to help mitigate vulnerabilities. More details about these webinars, as well as registration links, are below. We hope you will join us for both events.
November 3: ATM Attacks and Defenses
Because many financial institutions have closed or reduced the operating hours of many of their banking offices since the start of the pandemic, customer withdrawals of cash from ATMs have increased significantly. Unfortunately, the criminal element has shifted some resources to attacking ATMs and the personnel servicing them, including those who make currency deliveries. More than half of all ATM attacks in the United States involve thefts of the ATMs themselves, according to ATM Security Association data. The growth in dispenser jackpotting is also troubling. Because the methods of ATM crime can vary from city to city and month to month, it is critical that that ATM operators stay informed about current trends.
A panel of ATM experts join moderator David Tente, executive director of the ATM Industry Association, in discussing trends in cyber and physical attacks against ATM terminals and service personnel along with measures that can mitigate the risks. The panelists are:
- Brenda Born, supervisory special agent, Federal Bureau of Investigation
- Brad Moody, executive vice president of operations, Lowers & Associates
- John Toneatto, vice president of security and investigations, Loomis
The webinar takes place on November 3 from 1 to 2 p.m. (ET). To participate in the free webinar, please register.
November 10: Financial Exploitation of Aging Adults
Did you know that more than 10,000 US adults turn 65 every day, and that many of them will be victims of financial fraud? Elder financial exploitation is a growing problem, according to the National Council on Aging, which estimates financial losses of at least $36.5 billion dollars a year. With the rapidly aging population, we must identify and protect elderly citizens exposed to financial exploitation risks.
In the November 10 episode of our Talk About Payments webinar series, Drs. Thomas Blomberg and Julie Brancale, criminologists from Florida State University, describe the current research, theory, and policy responses associated with this growing social problem. They also address the patterns and variations of financial exploitation of older adults and discuss why some older adults may be more or less vulnerable than others. The presentation concludes with a discussion of areas in need of additional research and policy attention. Scarlett Heinbuch, a payments risk expert at the Atlanta Fed, moderates the discussion.
The webinar takes place on November 10 from 1 to 2 p.m. (ET). To participate in the free webinar, please register.
We encourage financial institutions, retailers, payments processors, law enforcement officials, academics, and other payments system stakeholders to join us for these informative webinars. You will be able to submit questions during the webinar. Please let your colleagues know about these webinars!
February 7, 2022
Data Privacy Legislation: Stuck on Pause?
How did you celebrate National Data Privacy Day on January 26? Oh, that celebration didn't make it onto your social calendar? Almost three years ago, I asked on this blog whether a federal privacy law would be passed in 2019. The short answer is no. Nor did a data privacy law pass in 2020 or 2021, despite numerous attempts by sponsors of both political parties. Some of the proposed bills provided comprehensive consumer protections for a business's use of personally identifiable information (PII). Others targeted specific elements of data privacy, such as requirements for businesses to protect data they collect or to notify customers in the event of a data breach.
It was thought that the European Union's passage of the General Data Privacy Regulation, or GDPR, which took effect in 2018, would spur federal activity in the United States. That same year, the state of California passed its comprehensive privacy law, the California Consumer Privacy Act. Some expected that Congress would head off state initiatives by passing federal laws to provide a consistent set of rights and responsibilities for all stakeholders. In the 117th US Congress, 30 data privacy/protection bills have been introduced, 12 in the House of Representatives and 18 in the Senate. Primary points of political disagreement have centered around preemption of state law and a private citizen's right to bring action against the offender rather than the enforcing governmental agency. No bill including either of these provisions has received bipartisan support. Social media platforms and their use of personal data have come under congressional scrutiny on several occasions over the last year with no formal action resulting from those hearings.
With little movement on the federal front, two states—Virginia and Colorado—followed California's lead in passing a comprehensive data privacy/protection law in 2021. Mississippi and Vermont recently introduced comprehensive data privacy legislation. Many other states have introduced some form of data privacy legislation addressing specific types of data such as healthcare or specific classes of people such as minors. The International Association of Privacy Protection provides an excellent source for tracking federal and state privacy legislation and news about data privacy issues.
We will continue to monitor developments on this important issue. In the meantime, place a candle in your choice of dessert, change your password, and have a belated celebration of National Data Privacy Day.
January 25, 2021
Resolve for Better Data Privacy
On the heels of a year that saw, among other things, ransomware attacks occurring about every 11 seconds and a significant supply chain breach affecting 18,000 public and private entities, better data privacy should top our collective list of New Year's resolutions. But if this wasn't among our resolutions, we still have National Privacy Day on January 28 to remind us of the need to be vigilant.
Frank Sinatra sang to us in "Love and Marriage" that you can't have one without the other. Likewise, you can't separate data privacy from data protection. Organizations that place a high value on data privacy implement strong data protection measures. Without doing so, privacy can't be assured.
The National Cyber Security Alliance, sponsor of National Data Privacy Day, has created calls to action employing a few basic privacy concepts that individuals and businesses can follow to keep data safe online.
For individuals: Own Your Privacy
- Personal info is like money: Value it. Protect it. Beyond personally identifiable information, this extends to e-commerce purchases, IP address, and location.
- Keep tabs on your apps. Don't just click "OK" on those pop-ups asking to access your location, contact lists, photos, and other personal data. Consider why it is needed and how it will be used and stored. Also, closely examine links and attachments in text messages and emails to keep malware and viruses off your mobile device.
- Manage your privacy settings. Revisit the data access permissions on your apps and web services.
For businesses: Respect Privacy
- If you collect it, protect it. Consider the data your business collects, the business purpose it serves, the way it is stored (such as data encryption), and the length of time it is stored.
- Adopt a privacy framework. Establish a privacy culture in your organization that manages risk and promotes transparency.
- Conduct an assessment of your data collection practices. Evaluate their adherence to applicable privacy regulations.
- Remember that transparency builds trust. Promote transparency with customers in the collection, use, and sharing of their personal data.
- Maintain oversight of partners and vendors. Ensure that third-party service providers share your priority for data privacy and protection.
As many of us will likely continue to work remotely well into 2021—and will likely continue our heavy use of the internet and e-commerce adopted last year—the new year provides a good opportunity to examine apps and behaviors that could put your data privacy at risk. For me, this includes reviewing locations where my payment information and other personal data are stored.
How will you resolve to better protect your data in 2021?
August 24, 2020
Facial Recognition Biometrics: Bruised but Still Standing
So far, 2020 has been a rocky year for facial recognition biometrics. In June, Amazon, Microsoft and IBM delivered a body blow, announcing they would not sell their facial recognition software to law enforcement agencies. They cited a lack of accuracy, a potential for misuse or abuse, and the lack of federal privacy legislation to safeguard individual rights. Widespread use of facial masks due to the COVID pandemic dealt another punch. Masks have generally rendered facial recognition inoperable for any number of applications on mobile phones. The masks have also hobbled the Transportation Security Administration's plans to further automate passenger authentication and check-in processes. Will the technology be able to recover and go another round?
Unfortunately, there is a great deal of misinformation and misinterpretation of studies about the technology behind facial recognition and its use, particularly with regard to claims of racial and gender bias. Critics often point to a 2018 study by MIT and Microsoft researchers in which three facial classification algorithms misclassified the gender of light-skinned males at a rate of less than 1 percent but darker-skinned females as high as 34 percent. Critics of facial biometrics technology have pointed to the research as evidence of bias against various minority groups.
It is important to note that "gender classification" is a very different from "facial recognition," although they are often lumped together in the media. In a gender classification process, a digital facial image of an individual is captured and processed through an algorithm that determines whether the image is that of a male or female. Numerous studies have shown that the accuracy of such classification systems is largely based on the database of images being used to "train" the algorithm—that is, to teach it to properly classify an image. The smaller the database, the less accurate the classification.
In a facial recognition process, the digital image captured by the camera is compared using a recognition algorithm to see if it matches the individual's image in a database or on their identification document. While the top performing algorithms are highly accurate, studies have found that results can vary based on lighting, camera definition, viewing angle, and other factors. While most people think facial recognition is new technology, the casino industry has used it to identify banned players since the 1990s.
In a future post, I will discuss the findings of the National Institute of Standards and Technology in its 2020 evaluation of more than 200 facial recognition algorithms. The promising news is that the top performing algorithms showed no discernible bias.
While there are certainly privacy and other issues connected to facial recognition and other biometric technologies, I believe objective education and discussions can address these issues. So I think the technology is not on the ropes but is ready to go another couple of rounds.
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