How You Are About To Become Responsible For Credit Card Fraud

How You Are About To Become Responsible For Credit Card Fraud

The basic idea is simple enough; back up a credit-card purchase with a PIN-type electronic signature. So far so good.

What is not so good is the change that this will make in the Credit Card system.

Under the current system “Chargebacks are a big pain in the butt for online merchants. Right now the card holder (you or I) has considerable latitude in refusing to pay for anything that is bought in a shop, especially online… most people do not actually realize just how much power they have under law when seeking to nullify a payment made by credit card. When a card holder does this, it is called a “chargeback” to the merchant..”

That’s right, the merchant takes all of the risk for bad transactions.. but not for much longer. In the view of the credit-card industry, this new system is now secure enough to move that risk. Given that there are only three parties in the transaction – the merchant, the bank and you, guess who will be left holding the bag?

That’s right… you. “…if you are hacked and fraudulent transactions appear on your bill, then you and the bank that issued the card to you are going to have to sort it out. You will not be able to charge the fee back to the merchant.”

First Check 21, now this.

If you were looking for a good reason to stop using credit cards, you have just found it.

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