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The Costs of PCI Non-Compliance
BobMesenbrink
2012-01-26 13:02

A recent news story tells of a Park City, Utah, restaurant that is questioning the right of its long-time merchant card processor to fine them for unproven data breaches. Fraudulent transactions totaling nearly $14,000 were blamed on a data breach at the restaurant. Although violations of PCI security standards were discovered within the restaurant’s point-of-sale system, no such data breach at the restaurant was ever proven. Nevertheless, VISA and MasterCard fined the restaurant’s card processor.

The processor then withdrew $10,000 from the restaurant’s account towards fines totaling $90,000. The processor is suing the restaurant for the rest of the fines. The restaurant is counter-suing, claiming that no breach was ever proven, that they never had a chance to defend themselves, and that they were never made aware of PCI compliance rules in the first place.

As this case continues, it will be interesting to see how it unfolds and what the consequences for the credit card industry will be. But for now, there are several hard lessons to be learned:
  • All merchants are expected to understand and comply with PCI security standards, even if their processor agreement was signed before PCI standards were available.

  • If a merchant is not PCI compliant, even suspected data breaches can result in fines.

  • Merchants have no opportunity to dispute claims before fines are taken.

  • Merchants are responsible for third-party software they use to accept payments.

  • The fines to merchants can be substantial and even greater than the actual loss.

    • The common thread here is that merchants have significant responsibilities to assure the safety of their customers’ card data. There are high penalties for a data breach when a merchant is not PCI compliant. Many merchants buy data breach insurance to cover the damages, and that is a very good idea. But it doesn’t solve the real problem and it doesn’t bring all the benefits that being PCI compliant would.

    By being PCI compliant, merchants will gain trust from their customers (potentially increasing business), won’t be responsible for security breaches (eliminating fines), and may have lower processing costs. Beyond that, PCI compliance often requires a comprehensive approach to data security that can help with other regulatory mandates and improve operations in general. In a world where theft of personal data is of concern, everyone needs to do their part to protect it.

     
    AT&T & T-Mobile Deal a No Go. Should We Care?
    CharlesWarren
    2012-01-12 18:30

    The much-publicized proposed acquisition of T-Mobile by AT&T has caused industry watchers everywhere to speculate about market impacts if the deal were to be consummated. In public comments Deputy Attorney General James M. Cole indicated in late August that the Department of Justice filed its lawsuit because they believed the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services.

    AT&T withdrew its merger application in late November following the release of the FCC's 109-page report stating that the deal would result in job losses, less competition and innovation, while triggering higher prices.

    While speculating about the big picture view is interesting, the results of recent mobile wireless projects within Expense Reduction Analysts suggest that there are still creative ways for businesses to save money.

    Consider these signs of inefficiencies:
    • Are voice minutes pooled effectively?
    • Should you be paying for unlimited data when the user profiles suggest lower cost data plans more than meets your needs?
    • Why are there persistent overage charges associated with texting?
    • What is the best way to compare the different mobile wireless suppliers cost models to ensure that the capabilities needed are being delivered at the best possible price?
    • Will a mobile wireless device usage policy help me to control my cost?

    These are just a few examples, but there are dozens of variables that can impact wireless pricing. Competition drives change and suppliers aggressively work to take each other’s customers making contracts much less binding. Plans should be reviewed monthly and enterprise contracts reviewed annually.
     
    Film Manufacturers Welcome the New Year with Price Increases
    JimAgnew
    2012-01-12 16:51

    As you may have heard already, the film industry is implementing a price increase this month, with increases ranging from 5% to 8%, depending on the type of film and geographic location. Some parts of the US are already paying the higher price; but, most will see the increase on purchases toward the end of the month.

    Film producers cite increasing resin costs as the reason for this increase, which was initially “floated” on the market back in the fall of 2011. Now, after several delays, it looks as like this one will stick. Given that we haven’t seen an increase in quite a while, a 7% change is not out of line with what is happening with other petroleum-based materials, so we see this as a reasonable market adjustment.

    The interesting dynamic in the resin industry involves rumors of additional increases in February and March. Will they stick? At this point, it’s hard to predict; but, resin manufacturers clearly appear intent on improving margins in 2012. Certainly, if resins increase, film producers will soon thereafter be announcing increases as well.

    Most suppliers will not permit massive “buy-ins” to stock up and avoid the increase, and we don’t advocate buying a year’s worth of inventory; but, it might be a good idea to accelerate purchases of those regularly consumed items just a bit. If a “penny saved is a penny earned”, then conscientious buyers will at least have dropped a little more to the bottom line in the process – and if prices don’t increase as rumored, there will be adequate stock on hand for the immediate future.

    Best wishes for a profitable – and safe – 2012!
     
    Health Insurance premiums on the rise again
    AndreaLuoni
    2011-12-15 11:55
    Is your health insurance cost taking over your general ledger? According to an annual poll of employers performed by the Kaiser Family Foundation and the Health Research and Educational Trust, employers’ health insurance premiums rose by an average of 9% in the past year. The time has come to find creative solutions, but this is a big area to tackle on your own.

    Most CEOs turn to a health benefits agent/benefits consultant. Although many of these advisors do have the pulse on the industry and can offer some good advice, their payment is that of an insurance broker -- determined by a commission base or percentage of the premium you pay. The transparency of recommendations can then become muddled and the choices can become narrow.

    On a recent discussion on a CFO Linkedin board, many CFO’s commented about their favorable experience looking at options “outside the box” and using a consultant not paid through commission. The CFOs found the creative options provided greater benefits, more customizable benefits to their employee base, and far better savings than their traditional brokers had brought to the table. All in all, the businesses won and the employees won – surely the divine goal of a savvy CFO.

    ERA’s independent, impartial and objective analysis of insurance is provided by Consultants with industry expertise who are licensed Property and Casualty brokers. ERA Consultants do not sell or broker insurance or provide recommendations regarding competing insurers’ products. This information is provided by your preferred broker.
     
    Taking the Confusion out of Recycling Labels
    JimAgnew
    2011-12-08 09:30

    Five questions come to mind when experts discuss the current state of recycling in the US – which is described by most recycling gurus as “anemic at best”. For our purposes here, we will pose these questions directly to you, the reader.
    1. Do you recycle?
    2. Are you recycling everything you're able to?
    3. Are you recycling too much, or recycling the wrong items?
    4. Do you even know what types of plastic you can recycle?
    5. And lastly, are you recycling the caps of your plastic bottles?
    My guess is that most of us can answer most of these questions; however, few have a definitive answer to all of them. Which is why these questions -- and many more like them -- are among the reasons that recycling has become a thorny issue, and explains in part the obstacles to getting recycling of plastic above its paltry 28 percent recovery rate.

    The truth is that the majority of the U.S. population has access to at least some curbside recycling services and that basic recycling has become part of daily living - at least for some people and materials. Unfortunately, even consumers who want to be good stewards of the environment are faced with the problem that there are too many labels and not enough clarity about what they should do.

    To overcome those challenges, the Sustainable Packaging Coalition, a project of GreenBlue has announced a pilot program and educational website that will put a new generation of recycling label on packaging at major retailers, and, in the process, educate shoppers and manufacturers alike about just how recyclable their packaging is. These new labels are intended to provide radical transparency to the marketplace and an excellent opportunity for manufacturers to rethink packaging designs and materials.

    Starting in January 2012, five retailers from a broad swath of categories will begin putting the new label on products. ConAgra Foods, Costco Wholesale, Microsoft, REI, and Seventh Generation have all signed on to the pilot project. The label will go on every type of packaging -- plastic, paper, glass, metal -- and the labeling system is designed to be dynamic and expandable as recyclers start to take in more types of materials. The website will also serve as a destination to help shoppers find out just how recyclable their purchases -- or potential purchases -- actually are.

    Because the pilot starts in 2012 and will incorporate feedback over the course of the year - with a wider run planned for 2013 - none of the participants predict substantial immediate changes to the packaging material itself. All of which suggests that, while we are apparently on the path to improvement, there's a long road ahead to get to widely recycled packaging.