EMV Chips Prompting Massive Fraud Bills
By Megan Williams, contributing writer
If any of your healthcare clients aren't using EMV payment systems, they might be at risk for enormous fraud bills.
Two merchants in Florida are reporting a 20-fold jump in losses from fraud, and the issue appears to be EMV according to BobSullivan.net. A class action suit is being led by the two merchants that “certainly runs into the billions of dollars.”
The Chargeback Issue
Milam’s Market, a four-store grocery chain, and Grove Liquors together have faced 88 chargebacks since the October 1 liability shift on chargebacks for fraudulent transactions. They also face $5 fees for each item. The merchants faced only four chargebacks during the same span the previous year.
The penalties have been assessed to the stores because they haven’t begun accepting chip-enabled EMV cards. The merchants though, claim they’ve had the equipment for some time and are simply waiting for “certification,” a process over which they have no control. According to NACS online, the plaintiff’s lawyers elaborated, “Merchants were not consulted about the change, were not permitted to opt out, were not offered any reduction of the interchange fee, the merchant discount fee, the swipe fee — or any other cost of accepting defendants' credit and charge cards. The liability shift was unilaterally imposed to the benefit of defendants, with no compensation, consultation, or consideration of any kind made to the class members.”
Impact On Healthcare
HIMSS has been pushing EMV payments as a safe alternative to traditional payment methods, stating they could possibly offer protection if a patient were trying to use a stolen credit card at a POS station. It's important to note that EMV does nothing to protect patient data. Rather, it simply limits fraud at the point of service.
EMV cards are part of an overall set of tools that can be used to combat healthcare fraud, with multiple variations on a solution being proposed by organizations such as the Smart Card Alliance.