If you haven’t enabled the chip reader yet, fraudulent charges may not be reimbursed

I’m not really surprised by a story I read today, as I go to a lot of businesses that tell me they still haven’t enabled the chip reader on their Point of Sale (POS) systems, but this is the first time I’ve actually seen a report of a business penalized it for it by a bank.

Judith Silva, the owner of King Seafood in Marathon, Florida had a customer use a stolen credit card. The charge was $91, and when the bank notified her it was a stolen card, they also notified her that they wouldn’t reimburse her for the fraudulent charges. Why? Because the card had a chip and she hadn’t used a chip reader during the transaction. Patrick Fraser of News7 in Miami reported the story.

He reports that King Seafood’s POS system does have a chip reader,

 but the company that supplies the machine hasn’t figured out how to make it work yet, so she still has to swipe the cards.

The vendor was not named. Nor was the bank.

Judith Silva: “They didn’t update their system on time, and they still don’t know when they are going to update their system, leaving me open to any fraudulent charges.”

Judith contacted the company that supplies the machine. They said, “We aren’t reimbursing you.”

Judith Silva: “They say they are not covering it because it does not fall into their liability contract.”

The unnamed company changed their tune after a news station’s consumer advocate contacted them, but there’s a lesson or two to be learned here, kids, including that you should check your liability contract with your POS vendor.

As for their POS machines, they [the company] told us they have been certified and ready to process chip cards, but the industry delays are the problem.

I have no idea what industry delays are they referring to, specifically. Maybe a reader knows?

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