Well that is down right crazy. Most sellers are people in their garages drop shipping 3PL. I'd trust them if they were background checked....maybe
There is nothing stopping anyone that has an e-commerce website from recording a clear version of your passwords along with all of your billing address and credit card informations.
There's no audits or anything.
Credit Card companies are very good at identifying the source of the leak from only a handful of fraud complaints you’ll be surprised how few places would be shared across even a small batch of cards say <50.
If the retailer is large enough to make an impact they’ll get caught and dealt with very quickly and the value of credit cards and matching PII/CHD today is very low a few million cards might be worth only a few 1000’s of dollars depending on their age, source and estimated credit limit.
Maybe that's why we need to move towards blockchain-based networks since trust is not required on blockchain, only proof.