A PYMNTS Company

US: Retailers sue Visa, MasterCard in antitrust suit

 |  March 10, 2016

Lawyers at Robbins Geller Rudman & Dowd and Florida-based Devine Goodman Rasco & Watts-FitzGerald have filed an antitrust lawsuit claiming that major credit card companies and the nation’s largest banks conspired to shift liability for fraudulent credit card transactions in the US to merchants.

The complaint filed in US District Court for the Northern District of California on Tuesday claims that the move to cards that include electronic chips designed to be more secure—so-called EMV chips—has been plagued by technical glitches and used as cover to illegally shift fraud-protection costs.

Merchants who failed to make an Oct. 1, 2015, deadline to get chip-enabled card reading systems up and running and inspected by third-party certifiers now face liability for fraudulent charges that were previously covered primarily by card issuers. According to the complaint, getting the chip-enabled systems certified has been a “nebulous process that was utterly outside [merchants’] control.”

“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 plaintiffs lawyers wrote. “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.”

Full Content: The Recorder

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.