Home Depot Files Federal Lawsuit Against Credit Card Companies | WABE 90.1 FM

Home Depot Files Federal Lawsuit Against Credit Card Companies

This story was updated at 5:17 p.m.

Home Depot filed a federal lawsuit that claims credit card companies are not properly protecting retailers and consumers from potential fraud.

The Atlanta-based retailer alleges MasterCard and Visa have forced consumers to use credit cards that aren't secure enough to prevent theft.

These so-called "smart cards" come with computer chips that hold account information.  

Home Depot said the credit card vendors' transactions would be safer if verified with a PIN number instead of a signature.

“They’re frustrated that instead of getting as much security as they can, they’re getting a half-measure,” said Matt Schulz, an analyst with creditcards.com.

Home Depot and other companies also say they are seeing expenses rise.

“It’s ridiculous that merchants are footing most of the bill for this costly conversion and the networks and the issuers can’t even take the step to protect the merchants and the consumers at the point of sale with PINs,” said Mark Horwedel, the chief executive of the Merchant Advisory Group, which represents dozens of retailers, including Home Depot.

MasterCard spokesman Seth Eisen said proper investment is made in both technology and security: “The security lies with the EMV chip in the card and how that communicates to the terminal. The signature or the PIN then is how you’re confirming that card holder’s identity. It’s the chip that makes the data that much more secure."

In a statement, a Visa spokesperson said, "We are aware of the lawsuit and have filed a notice to transfer the action to the pending multi-district litigation.”

A resolution to this lawsuit isn't likely to come soon.

"Anti-trust lawsuits take years to resolve, if they go to trial and very few of them do.  We're not going to see that for many years," WABE legal analyst Page Pate said.

Home Depot did not disclose how much they're suing for.