Consumer warning for chip credit card owners

NEW YORK (WABC) -- The chip enabled credit cards are supposed to be safer. And most of us have already gotten them already. So why are stores still having us swipe not dip? 7 On Your Side went undercover and found some answers that could save you big bucks.

Swiping. Not dipping. That's what consumers are getting a lot of. Chip cards provide more security than cards with magnetic strips only if you use them properly, inserting not swiping as we were instructed at many major retailers.

Bed Bath and Beyond, Staples, Chick-fil-A, and Panera Bread, are just a few on a long list of retailers that do not have chip card readers up and running. Some even block or tape over the slot where the card should be inserted.

Chip cards better protect cardholders by generating a code between you and retailer. The codes are useless to criminals looking to skim and scam your card number off a swipe. The credit card industry asked retailers adopt the new system by October 2015.

Retailers complain they're in limbo since chip card readers must be certified by the credit card companies to make sure they work.

So we have retailers out there who have things sitting there ready to go installed for six months and they're still waiting for the card people to come around and certify and turn it on. The card industry blames retailers for delaying.

So what are the consequence for you, the consumer?

"The consumers are going to pay for it mo matter what," said Adam Levin, the founder of Identity Theft 911.

Levin, the author of "Swiped" explains if you swipe a chip card the merchant not the bank will be responsible for covering a fraud charges for you.

And many aren't in a financial position to cover major security breaches - which means you could be left holding the bag.

"A lot of business have not read the memo they don't understand what kind of damage that's wrought on consumers anytime you have something like this," Levin said.

The big takeaway, if you want to eliminate the risk at a merchant who still swipes use cash or simply walk away. If you swipe, monitor your accounts carefully. And report fraud to the issuing bank as soon as possible.

And be on the look out "phishing scams." If anyone calls, texts or emails wanting you to verify info on your new chip card, that's the latest scam phishing for your personal information, hang up or delete.

Bed, Bath and Beyond response:
Bed Bath & Beyond continuously seeks to employ the highest standards of security. As we implement EMV technology, we will actually be adding protections that go above and beyond the chip and sign process. We are actively working with our industry partners and are currently implementing a system compatible with EMV that also includes end-to-end security as well as a smooth transaction process for our customers. We are currently processing chip transactions in select stores and are rolling out the program now on an ongoing basis; in the meantime, we continue to aggressively enforce our multiple layers of security protections.

Mastercard Response:
The consumer is protected. Period. In May 2014, we extended our already existing Zero Liability policy to all consumer and small business cards in the U.S. Under the policy, our cardholders are not held liable for any fraudulent or unauthorized transactions on their account. That same protection is now in place in all markets across the globe, making MasterCard the only payment network to provide that peace of mind.

October 2015 was never set as a deadline. That was a milestone we had set to help provide an incentive to both merchants and issuers in the migration plans. As you noted, that was when the liability would shift to the party with the lower technology. But, each merchant and issuing bank would determine when would be best for them to implement chip card technology.

Since the U.S. started this journey, we've begun to see a reduction of counterfeit card fraud. And the trend will continue as more cards are activated and more terminals adopt the EMV standard.

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