SAN FRANCISCO (3/11/16)--Merchants have filed a class action, antitrust lawsuit against major credit card companies and some of the nation's largest banks. It charges that the defendants "conspired to shift billions of dollars in liability" for fraudulent credit card transactions in the United States to merchants.
The suit revolves around an Oct. 1, 2015, deadline for merchants to set up card-reading systems that can accept cards with EMV-chip security technology. EMV cards contain a microchip that generates a new number every time the card is used at a pay terminal, making skimming--stealing the card’s information using an illegitimate card reader--almost impossible.
Under the EMV rules, merchants failing to meet the deadline now face liability for fraudulent charges that were previously covered primarily by card issuers.
The lawsuit complains that class member merchants have been "unlawfully subjected" to the liability shift "despite having purchased EMV-chip complaint point of sale card readers" and having "otherwise complied."
The lawsuit was filed this week in the U.S. District Court Northern District of California San Francisco Division.