You see, its not the credit card companies that take the loss, it's the merchant that accepted the card in the fraudulent transaction.(Even though the transaction was approved by the credit card company to begin with.  YES APPROVED!) The merchant will not only lose the merchandise that was sold in the transaction, they will also get what is called a "charge back" in which the credit card company automatically deducts the amount of the original charge from the merchants bank account, they also charge the merchant a fee for this which ranges anywhere from $20-$50 per transaction.  So imagine if 200,000 credit cards are charged fraudulently, the credit card companies just made $4-10 million on those transactions.  

Now here's the part that affects you as a consumer.....
When merchants lose money due to fraudulent transactions, they have to raise prices to make up for the losses incurred.  (Similar to raising prices due to shoplifting)  What this means to you is that you just paid $5.00 for a $2.00 item and who got the profit???  Your credit card company.  So when you think you have a great deal with a low interest rate on your cards, or travel rewards, or what ever, just remember, you are paying for them one way or another.

Merchants have been fighting the big credit card companies for years on this issue.  Many companies are hoping that with the recent loss of info by Card Systems, it will bring this issue to light for consumers and the credit card companies will finally have to get their act together.

Create Account
Nickname:
Password: