NEW YORK ( TheStreet) -- The recent Home Depot ( HD) and Target ( TGT) credit card information breaches told consumers what banks, retailers, credit card companies and experts have known for a long time: U.S. credit cards are absolutely not secure.
Home Depot announced earlier this month that a credit card breach put millions of its customers' information, money and credit at risk. Security blogger Brian Krebs discovered that the software used to infiltrate Home Depot's system was similar to that used last year to snatch the data of more than 70 million Target shoppers.
Back in 2007, 94 million shoppers had their data compromised after using their cards at TJX (TJX) stores including T.J. Maxx and Marshall's. In January, the data of more than 300,000 cardholders was accessed during a breach at Neiman Marcus. In August, hackers lifted data from 33 P.F. Chang's restaurant locations. Those aren't leaks: Those are bursting dams adding to a devastating flood.
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"The bottom line is that we can't simply afford to stick our heads in the sand anymore,” says Curtis Arnold, founder of credit card industry rating and monitoring sites founder of CardRatings.com and BestPrepaidDebitCards.com. "This financial crisis [I'll call it what it is] is costing all of us way too much...financial institutions, retailers, businesses and consumers alike."
Credit protection firm BillGuard estimates that losses from fake charges tied to the Home Depot breach could reach upwards of $3 billion after a hacker sold millions of stolen credit card numbers on the Ukraine-based site Rescator. While most of the blame for these breaches lies with the hackers themselves, Arnold and other experts note that the decades-old credit card technology still being used in the U.S. is largely at fault.
U.S. retailers, banks and credit card companies still rely largely on cards magnetic strips that contain far more data than any consumer should be carrying in his or her pocket. They're easy to read, easy to duplicate and easy for hackers to exploit.
"Virtually ever cardholder has been affected directly or indirectly," Arnold says. "Our current swipe and sign system is quite antiquated . . . a dinosaur when it comes to payment technologies."