Consumers may not feel safe about their plastic, but they keep charging

SCOTTSDALE, Ariz. (AP) _ Jennifer Dunafin figures her credit card information isn't really secure, but she and her husband still use their cards almost every day. <br/><br/>``I don't think it's

Wednesday, June 22nd 2005, 9:42 am

By: News On 6

SCOTTSDALE, Ariz. (AP) _ Jennifer Dunafin figures her credit card information isn't really secure, but she and her husband still use their cards almost every day.

``I don't think it's completely safe, but what choice do you have?'' the 29-year-old said during a shopping trip to a mall. ``Most places you can't make major purchases without a credit card.''

On Friday, officials announced that 40 million credit card accounts were exposed to possible fraud because of a security breach at a card processing company. It was the latest in a string of recent breaches at financial institutions.

Such cases are likely to remind consumers that data is not secure, but the nation is unlikely to change its behavior, industry watchers say.

Federal laws that protect people from liability for fraudulent charges help quell widespread fears, and even though many people feel vulnerable, the realities of the economy dictate credit or debit card use for many transactions.

``There's no way around it,'' said Lewis Mandell, a professor of finance at the University of Buffalo. ``We live in a sophisticated payment environment. Everyone is expected to have a credit card.''

But he noted there is a cumulative effect from the mishandling of information, and it could increase people's anxiety about using plastic, which card companies are pushing for nearly every transaction, all the way to buying a cup of coffee.

``We have a notion that the folks that have our credit card information are pretty savvy, reliable people ... I may become a little more apprehensive'' if breaches continue, Mandell said.

The compromised data at Atlanta-based CardSystems Solutions Inc. did not include Social Security numbers _ a key piece of information often needed for identity theft. But it had names, banks and account numbers.

The disclosure followed others by financial institutions in the past two months, including information lost on 3.9 million Citigroup Inc. consumer finance customers, theft of 1.4 million credit card numbers from a DSW Shoe Warehouse database and theft of information on 100,000 Wachovia Corp. and Bank of America Corp. customers.

Under federal law, credit card holders are liable for no more than $50 of unauthorized charges. Some card issuers offer zero liability to customers on unauthorized use.

But Jean Ann Fox, director of consumer protection at the Washington-based Consumer Federation of America, said debit card fraud can be an even bigger problem because there are not as many protections.

``The burden is really on consumers to be very careful in how they use their card and how they safeguard their PINs and passwords and to check statements,'' she said.

Harold and Barbara Freedman, visiting Scottsdale from London, said they've twice had their account information stolen and take advantage of services that help monitor accounts, but they don't really feel their information is secure.

``It does deter me'' from using plastic as often, said Harold Freedman, 67, holding an armload of shopping bags. He was using cash for most things during his vacation shopping spree, but he acknowledged paying that way ``is not very clever because you have to carry cash.''