Financial Privacy Blog

Discover Magazine - January 2008 - P. 45

Discover Magazine posted a short article in their January 2008 issue explaining how computer scientists in Switzerland (it just had to be the Swiss - they of ultimate banking privacy and security) are getting closer to breaking the 1,024 bit encryption coding used to secure Internet messages.

I’m no mathematician, but apparently hackers could use this new factorization technique, along with multiple computer load distribution, to more quickly crack a random 1,024 bit number.

We’re in no imminent danger of unsecured Internet transactions, but this just highlights to need to move away from technical protocols to more basic data devaluation, i.e. make the data worthless so no one has any incentive to steal it.

WSJ - January 10, 2008 - D5

Alternative web payment systems (PayPal, Bill Me Later, eBillMe, etc.) can be useful, but there are some pitfalls:

• Fraud protection on unauthorized purchases with credit cards is mandated by federal law. Fraud protection with alternative web payment systems is voluntary and limited.
• Services that extend a new line of credit (and then max out that line) can cause a precipitous drop - up to 100 points - in your credit score.
• Interest rates can be much higher on pay later services, ~20% annual rate versus ~14% for the average credit card.

Buyer - and payer - beware.