On January 27, the House Subcommittee on Commerce, Manufacturing and Trade will host a hearing to discuss solutions to the ever-growing problem of cybercrime. The Committee has recognized the need for a solution that could help alleviate the consequences consumers face in the event of a data breach. Chip and PIN technology is one such solution that should be part of this conversation. With these efforts in mind, the American Consumer Institute applauds Subcommittee Chairman Michael Burgess (R-TX) on his efforts to explore ways to eradicate identity theft and financial fraud.

In the last several months, combatting cyber threats and finding a solution to data breaches has been at the forefront of the minds of both policymakers and consumers alike. While the federal government has mandated chip and PIN-equipped cards in government transactions, many card issuers are opting for a short-term solution and are choosing to skip the PIN code—which is the most important element of protection—and issuing only chip-enabled cards to American consumers. It was recently reported banks and credit card companies are concerned consumers aren’t capable of remembering a four-digit PIN code, a ludicrous and unsubstantiated claim.

As part of this conversation, the American Consumer Institute hopes the Committee asks banks and card issuers some of the many unanswered questions. Here are mine:

  1. Why is the United States among the last developed countries in the world to adopt chip and PIN technology?
  2. Why are financial institutions, banks and credit card companies issuing chip cards with signatures instead of PINs, a more secure method of protection?
  3. Won’t the pending requirement that merchants convert to Chip and signature terminals only make it more costly for merchants to transition to Chip and PIN, thereby forestalling a more superior anti-fraud solution?
  4. Do financial institutions honestly think that consumers lack the intelligence to remember a four-digit code?
  5. Given the fact that financial institutions provided monetary support to retailers in Europe to make the transition to the new chip and PIN technology, why won’t they do that here in the United States?
  6. Why have financial institutions taken a backseat to the federal government on this critical component of our economy?