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New Rules To Increase Credit Card Security Take Effect

New Rules To Increase Credit Card Security Take Effect Click to Enlarge Photo: Thinkstock

Oct 1, 2015 at 6:07 pm

St. Cloud, Minn (KNSI) - Thursday marked a milestone in new rules for credit and debit cards.

Any business without a reader for the new chip-embedded credit and debit cards are now liable for any fraud committed on a card transaction.

"The chip card is a higher level of security, and creates a special code for each charge transaction you make," said George Meinz, an attorney with Gray Plant Mooty who works closely with the banking industry.

He says the new rules are an effort to improve security by requiring retailers who don't have the most secure systems to bear the risk of fraud losses

“With the implementation of chip-embedded credit cards, legal liability for credit card fraud will be determined by who has implemented the chip technology."

Meinz says card issuers that have not sent their customers new chip-embedded cards by October 1 will remain liable for counterfeit card fraud.

He says businesses that have not invested in new chip compatible point-of-sale technology can still swipe the new cards, but they'll be on the hook for the bill.

Meinz points out that the new rules aren't a cure all for credit card fraud and theft.

"The bad guys aren't going to go away, they will just look for new weaknesses to exploit and profit from.”

Matt Demczyk

Posted By Matt Demczyk

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