{"id":192,"date":"2019-06-25T13:04:27","date_gmt":"2019-06-25T13:04:27","guid":{"rendered":"https:\/\/www.apslaw.com\/its-your-business\/?p=192"},"modified":"2023-04-26T09:17:37","modified_gmt":"2023-04-26T13:17:37","slug":"credit-card-fraud-potential-liability-for-gas-stations","status":"publish","type":"post","link":"https:\/\/www.apslaw.com\/its-your-business\/2019\/06\/25\/credit-card-fraud-potential-liability-for-gas-stations\/","title":{"rendered":"Credit Card Fraud & Potential Liability for Gas Stations"},"content":{"rendered":"

Gas station owners currently face the challenge of updating their automated gas pumps to be compatible with EMV technology (EMV\u00ae is a registered trademark owned by EMVCo, LLC<\/em>).\u00a0 The major American credit card companies have agreed to extend their deadline for the implementation of EMV technology in automated fuel pumps to October\u00a01, 2020.\u00a0 Once that date passes, gas station owners may see a substantial increase in their potential liability in connection with credit card fraud.<\/p>\n

EMV technology was developed by credit card companies to reduce credit card fraud.\u00a0 Unlike older credit cards that used a magnetic strip on the back of the card that was read by the merchant\u2019s credit card terminal, EMV technology involves small computer chips embedded in the credit card.\u00a0 The computer chip allows for each transaction to have its own unique number code, thereby reducing the likelihood of credit card theft.<\/p>\n

While the United States government has not passed laws mandating the implementation of EMV technology at merchants\u2019 card terminals, the credit card companies have sought to accelerate the implementation process by amending their policies with respect to the assumption of liability in cases of credit card theft.\u00a0 Before the implementation of EMV technology, it was the industry practice in the United States for the credit card companies to assume the liability in most cases of credit card fraud.\u00a0 For instance, if someone fraudulently replicated a valid credit card and used the false replica to purchase a product from a merchant, the credit card company, upon discovering the theft, would reimburse the merchant for the value of the fraudulent transaction.<\/p>\n

Major credit card companies, including Mastercard, Visa, and Discovery, decided to change their policies with respect to liability in the event of fraud.\u00a0 They set an initial deadline of October 1, 2015 for merchants to install the EMV-compatible chip readers.\u00a0 Following this deadline, the credit card companies\u2019 liability policy, in the event of a fraudulent credit card case, was to be as follows: \u00a0(a) if the fraud stemmed from a non-EMV credit card, then the credit card company would still assume liability; (b) if the fraud stemmed from an EMV credit card and the merchant had already installed and used the EMV-compatible card readers, then the card company would still assume liability; and (c) if the fraud stemmed from an EMV credit card and the merchant had not installed and\/or used an EMV-compatible card reader, then the merchant would assume liability for the fraudulent transaction \u2013 the credit card company would not reimburse it for its loss.<\/p>\n

Although the credit card companies set the October\u00a01, 2015 deadline to encourage merchants to implement the new chip reading technology as soon as possible, it became clear that not all merchants would realistically be able to comply within the deadline.\u00a0 In particular, owners of gas stations found it very difficult to update the credit card readers located in their outdoor, self-serve oil pumps, or \u201cAutomated Fuel Dispensers\u201d (\u201cAFD\u201d).<\/p>\n

In comparison to other service and retail industries, gas station owners face more difficult obstacles in implementing EMV-compliant credit card terminals, because of the complicated infrastructure and technology used to enable fuel pumps.\u00a0 To use EMV technology, an outside gas pump terminal may be required to support Ethernet connectivity, which might require re-wiring every gas pump connection.\u00a0 As a result, many gas station owners were faced with replacing not only an individual credit card terminal, but possibly the entire AFD as well.\u00a0 This problem is particularly challenging for independent, single-store operators or small chains that own and operate AFD units but may not have the necessary personnel, technology or resources to bring their stations into EMV compliance.<\/p>\n

In consideration of these challenges, the major credit card companies announced that the original deadline of October\u00a01, 2015 would be extended for AFDs to October\u00a02017.\u00a0 Upon further review, in late 2016, due in to an insufficient supply of suitable hardware and software available to gas stations and the practical difficulties and costs associated with the implementation, the credit card companies announced that the deadline for gas stations to implement the EMV-compatible equipment for AFD units would be extended again to October\u00a02020.\u00a0 This extension does not necessarily apply to non-AFD credit card terminals used at gas stations.<\/p>\n

Although gas station owners have been granted another two-year extension, they should certainly try to update their AFDs as soon as possible to avoid potential liability after the current extension expires.<\/p>\n

[Updated July 15, 2019 to include reference to EMVCo, LLC\u2019s registered trademark]<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Gas station owners currently face the challenge of updating their automated gas pumps to be compatible with EMV technology (EMV\u00ae is a registered trademark owned by EMVCo, LLC).\u00a0 The major American credit card companies have agreed to extend their deadline for the…<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2,21],"tags":[90],"class_list":["post-192","post","type-post","status-publish","format-standard","hentry","category-business-law","category-contracts-law","tag-credit-card-fraud"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts\/192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/comments?post=192"}],"version-history":[{"count":0,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/posts\/192\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/media?parent=192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/categories?post=192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.apslaw.com\/its-your-business\/wp-json\/wp\/v2\/tags?post=192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}