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Obama signs order to protect consumers from identity theft

President Obama signed an executive order Friday to protect consumers from identity theft by strengthening security features in credit cards and the terminals in which they are processed.

In an executive order signed at the Consumer Financial Protection Bureau, Obama ordered that government agencies that process payments employ enhanced security features. Those measures include so-called "chip and pin" technology, meaning that secure information is embedded in a chip in a credit card and users must enter a PIN number in order to use the card, much like they currently do with a debit card.

Obama announced a new federal "Buy Secure" initiative meant to spur retailers and banks toward using the chip and pin technology rather than the magnetic strips on the back of most credit cards, which are vulnerable to theft. The moves come in the wake of massive data breaches at retailers nationwide, including Home Depot.

The company, along with 15,000 others including Walgreen's and Target, has promised to use machines that employ the chip and pin technology by next year.  American Express will spend $10 million to replace credit card machines at small businesses and MasterCard will provide consumers with free identity theft monitoring.

"The idea that somebody halfway around the world could run up thousands of dollars in charges in your name just because they stole your number or because you swiped your card at the wrong place and the wrong time, that’s infuriating. For victims, it’s heartbreaking. And as a country, we’ve got to do more to stop it," Obama said.  

Obama also directed law enforcement to share more information about identity theft with the private sector. The Federal Trade Commission will also work with credit bureaus to help victims recover their identities faster after they are stolen.

The president said he is no stranger to the idea of identity theft - he said Friday that his credit card was declined at a New York restaurant last month because the company thought it might be a fraudulent charge.

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