Sometimes lost in the discussion of the impact of Regulation II is the fact that the final rules pertaining to the fraud adjustment have not yet been issued by the Federal Reserve. Commentary is still coming in and merchants are continuing to provide their analysis to the discussion. In this case, it is supermarkets that took a look at debit card fraud and provide some very interesting data in the report mentioned in this article. Aside from a rehash of the Fed data from the Reg II final rules, they also offer some additional industry analysis as to where there fraud losses occur and the delta between PIN debit and signature debit is extremely wide.
For example, the dollars lost to debit card fraud by U.S. food retailers was almost 100% attributable to signature debit (Click here for the full report). If other industries are able to quantify these kind of variances, their case to disallow a fraud adjustment for PIN debit transactions might be strong enough to sway the rulesmakers.
In association with the report, FMI issued a letter to Ben Bernanke, chairman of the Board of Governors of the Federal Reserve, urging the Federal Reserve to review supermarket costs associated with preventing debit card fraud before finalizing its interim final rule on interchange-fee fraud adjustment provisions.
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