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Potential Issues for Businesses Regarding New Credit Card Technology

The many requirements with which merchants and business owners must comply are ever-changing. As technology changes, so do legal regulations and requirements and, often, it is difficult for owners to keep up. Fortunately, having the help of an experienced business litigation attorney can help ensure that you meet all the necessary requirements to avoid penalties or other legal liability.

Information Regarding EMV Cards

As of October 1, 2015, any business that accepts credit cards for purchases in-store should have the technology needed to read EMV credit cards, also commonly known as “chip cards.” These cards use a new technology to store data in a microchip embedded in the credit card instead of using a magnetic strip on the back of the card to store information. Experts believe that this chip technology is significantly more difficult to clone or counterfeit and, therefore, they believe that credit card fraud for in-person transactions will be significantly reduced. In fact, the only way that professionals believe a criminal can fraudulently use a credit card is by physically stealing the credit card and using it before the owner cancels the card.

Visa, Discover, American Express, and Mastercard have all began using the EMV chip cards and have enacted guidelines that any business that accepts these cards in-person must have the technology needed to read the cards. Devices needed can either read the card when it is dipped into a machine or by using a scanner that can read the chip when the card is presented against it. The deadline for compliance was set at October 1, though it was expected that compliance would not be immediate for all businesses and consumers may still have to swipe cards in the process.

Liability For Fraudulent Transactions

Generally speaking, legal liability for fraudulent transactions rests on the financial institution that issued the card. However, since the deadline has passed, if a business is not EMV compliant, it could face liability for fraudulent purchases. Liability may exist if the following apply:

  • A business accepts payment by credit cards for in-store purchases;
  • The business does not have EMV-compliant technology;
  • The fraudulent transaction would likely not have happened if the business had the capability to use EMV cards;
  • The transaction was not due to a stolen or lost credit card.

In such instances, a small business or store owner could be swept up in a legal battle because of non-compliance with EMV requirements. In such situations, you should always have skilled business legal counsel on your side. Furthermore, it is always better to avoid potential liability through compliance and an attorney can advise you of the necessary steps to take.

Find Out How a West Palm Beach Business Litigation Attorney Can Assist You

Anytime there are new legal requirements or regulations that may affect your business, it is always wise to consult with an experienced business litigation lawyer who understands Florida business law and can help you make the transition to comply with the requirements. In addition, if you are facing legal liability for failure to comply with a provision, one of our skilled business attorneys can help defend against any claims. Please do not delay in calling Pike & Lustig, LLP at 561-855-7585 for assistance today.

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