Neither banks nor consumers get hit with the fraud bill. It goes to the retailers who's responsibility it is to verify that the person charging is the person who's card it is.

I worked for a major retailer and handled all the credit card issues. We'd lose $1MM a day to credit card fraud. We get a letter in the mail notifying us of the fraud and to provide either provide proof that the cardholder was lying or we'd be out the funds. I don't think I have ever been able to prove the cardholder was lying. And those electronic signature pads don't help.