Instant Credit Income Verification: A Retail IT Migraine On The Horizon?

A U.S. Federal Reserve Board proposal being fought by retailers would have store clerks asking customers for proof of their salaries before issuing instant credit. But the Credit Card Act proposal raises many troubling questions for retail IT execs. To be able to later prove its compliance with the federal rule, will retailers have to enter the salary data into its POS? Will copies have to be retained and scanned? Will this new mandatory goldmine of identify-thief-fantasy-data points attract more aggressive cyberthieves? Even worse, will retailers be tempted to add such information into CRM databases?

From a non-IT perspective, the move would certainly discourage consumers from accepting—or even pursuing—instant credit, which has been a wonderful thing for merchants. It's unlikely that shoppers will be thrilled when asked by gum-chewing, teenage POS jockeys to whip out paystubs or a copy of last year's 1040s.

Consider an analogy: The police chief who lives next door has a town ordinance passed requiring you to store in your basement a ton of heroin and cocaine that the police department has just seized. "Wait a second," you say. "First, I don't want this stuff, nor do I need this stuff. If you think it needs to be preserved, then you preserve it. All it's going to do for me is make my house an irresistible target for every drug dealer in the next three counties, putting my family in danger."

The argument has been made before that a lot of payment data would be better protected if it were retained by banks and processors and not the local fish-seller or upholsterer. But by adding paystub and/or tax return data into the mandated data, this is getting ludicrous. We’re reminded of the old commercial for Life cereal. "Let's get Mikey the merchant to store it. He'll store anything!" But in this case, it's highly unlikely the retailer will end up liking it.

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