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Can we deny EFT claims with chipped cards?

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How does use of a chip to conduct the transaction affect the claim? If the consumer still has the card in their possession, can we assume the transaction was done with an approved access device since the EMV chip cannot be duplicated?

I have read that the chip itself can't be cloned, but cloned data can be put onto the magnetic stripe of a card with a fake EMV chip, which can be used to spoof merchants into letting the fraudster swipe the card with the cloned information. That creates doubt in my mind. I would further confirm with the customer where they were when that card shows to have been physically used if there is doubt. Assuming a card was an authorized access device imposes liability on the consumer, so be ready to back that up.

We had a case where a teacher had numerous charges spanning over weeks that she claimed were unauthorized. As it turned out the teacher routinely left her class and left her wallet in the class with the card in it. A student would remove the card and pass it to her mom who used the card and then it was returned. The teacher never knew it was missing. This is factual case, not fiction, so it’s not a created case to say “what if.”

At the end of the day, the burden of proof is on the bank. Eliminate what is not, so you can know what is. When you are confident it was or was not an authorized access device, proceed accordingly.

First published on 11/28/2021

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