Merchants and Consumers May Be On Financial Hook For Swiping Card With Chip
A new report shows that swiping that debit/credit card with the chip is not a good idea.
Many financial institutions have been sending consumers new debit/credit cards with the chip installed in it. And, even though chip readers are relatively common now, not all merchants have begun using the technology, which still allows a person to swipe their card using the magnetic strip.
The problem is that when swiping the card instead of using the chip reader, the business is on the hook for any fraudulent charges that result… not the bank. If the business cannot afford to cover these changes, the consumer then becomes responsible for the bank theft.
The chip cards were introduced to boost security after hackers led a series of attacks. Banks started using the chip cards to make sure consumers were not held responsible for the charges, but it’s only used when the card has been run through the chip reader. With this high-security alternative, banks have put both businesses and consumers in a bad position, especially if a store has yet to adopt the new method.
According to several retailers, new readers have yet to be installed because the certification process on the side of the credit card companies can take six months or longer.
Consumers need to be mindful about swiping their chip card. And, in cases where there is no chip reader, consumers are advised to watch their bank accounts closely – reading statements or going online – to ensure there have been no fraudulent charges made.