Retailers said to be weighing lawsuits over chip cards, fraud-liability shift
U.S. retailers are contemplating lawsuits against banks and credit card companies over the slow rollout of chip-based card technology and the possible financial liability merchants began facing that started Oct. 1.
Retailers that did not install newer chip-enabled point of sale terminals in stores, restaurants and hotels as of Oct. 1 have to pay an extra fee to cover counterfeit fraud. Before Thursday, banks were liable for consumers’ use of magnetic stripe credit and debit cards. The liability shift deadline on Oct. 1 was set by banks four years ago to prompt the use of more secure chip technology to help lower the cost of fraud.
The passing of the Thursday deadline didn’t apparently cause any significant problems for store operations, according to comments from five national retail and credit card officials. That’s partly because consumers can still use magnetic stripe cards and might not even possess the newer chip cards.