Suit Claims Visa, Mastercard And Amex Profit From Fraud
from the mixed-motives dept
A new lawsuit has been filed against the major credit card companies – Visa, MasterCard American Express and Discover – saying that they profit from online fraud, and thus are doing little to prevent it. The argument is that whenever there’s fraud, it’s the merchants who end up footing the bill, while the credit card processors still make their fees on the fraudulent transactions. The lawsuit goes so far as to claim that the credit card companies could prevent many fraudulent charges but have specifically chosen not to implement the changes in order to keep getting these fees. The lawsuit also says that it’s the monopolistic practices of these credit card providers that allows them to structure contracts that force these charges on merchants. They say no one would ever agree to such a contract if they had a choice – but there is no choice. Those filing the complaint are probably going to seek class-action status, so this could become a much bigger deal.