(WJBK) - A big change is coming one week from Thursday (Oct. 1st) regarding who will bear responsibility for credit card fraud that businesses and consumers may not be aware of. Today, if an in-store transaction is conducted using a counterfeit, stolen or otherwise compromised card, consumer losses from that transaction fall back on the payment processor or issuing bank, depending on the card's terms and conditions.
Effective Oct. 1, 2015, the liability for card-present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction. This means if a business is not supporting EMV (Chip and pin or chip and sign) technology, they will be responsible for fraudulent transaction that occurs in the store. Some stats:
• 1.2 billion: Estimated number of credit and debit cards that have to be upgraded to chip cards.
• 12 million: Estimated number of point-of-sale terminals that have to be upgraded to accept chip cards.
• 59%: Percentage of retail locations that will be EMV-compliant by the end of 2015
• $3.50: Average cost for issuing a new EMV card.(compared to $1.00 for the typical magnetic stripe cards)
• $500-$1,000: Average cost of an EMV-compliant point-of-sale terminal.
This is being done in an effort to reduce identity theft and to make our national payment infrastructure more secure. Year to date there have been 551 data breaches accounting for 150,135,020 compromised records (We have already surpassed the 2014 total of 85.6M compromised records).
VIDEO: Learn more from David Derigiotis from the Professional Liability Center of Excellence.