February 16, 2014

Under most circumstances, what is the credit card holder liable for when someone uses the card fraudulently? Why is this important to know?

5 thoughts on “February 16, 2014”

  1. Kat Graham says:

    Great question! I really had to research for this one! From what I have gathered, federal law limits the liability of the card holder to $50, no matter how much was charged on your card by the unauthorized person(s). If just the credit card account number itself is stolen (I think meaning if the unauthorized person(s) doesn’t have your actual credit card), federal law guarantees that the card holder has absolutely no liability. I also learned that several credit card companies have adopted a “zero liability” policy. That means that if there are any fraudulent charges on your account, you are not held responsible for any of it.

  2. Garrett Haag says:

    I do believe the bank is the one liable for if someone takes your card and you report it in a timely manner, the bank is more motivated to make sure that it is resolved because it is the banks money that is getting used, it is important to know so if you card is ever taken you know what to do about it, you need to alert either the bank or the credit card company as soon as possible when this happens. A debt card on the other hand is more of your money so you may have a little more at risk if someone gets your debt card information, either way cancel the cards and alert the bank or credit card company.

  3. Kat Graham says:

    Oops…I forgot to say why this is important to know! This is important to know, because there is a chance that you could fall victim to fraudulent charges. If you ever do become victim to fraudulent charges, it would ease the burden knowing that the most you may be liable for could be $50 or you might not be liable at all ($0)!

  4. Mike Finley says:

    Well stated, but I must say, Katherine dug down to the absolute truth on the matter. Well done! Let’s review.

    In most cases the card holder must report fraud within 60 days to avoid any liability beyond $50. Simply meaning that no matter how much fraud there is, the card holder is only out the $50. The reality is, many, and I would also say most credit card companies waive the $50 liability as well. Report the fraud within 60 days and you will have zero liability.

    The benefits page that comes with your credit card will provide you the guidelines as they relate to your specific card. On a side note, always contact your credit card company when you are planning to travel. Specify the dates either on the phone or online to avoid their fraud team from rejecting your card because you are out of your normal range. Knowledge is POWER!!!!!

  5. Garrett Haag says:

    I have to say I was impressed with Kat’s answer.

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