Question

Question
Kendra’s credit card is stolen. She calls the credit card company to report it and the company says there are three large purchases on her card. She tells the company she did not make those purchases. Why does the credit card company tell her she is only responsible for $50.00 of those charges?

(1 point)
Responses

Federal law regulates a consumer’s liability for fraudulent charges.

Federal law regulates a consumer’s liability for fraudulent charges.

Credit card companies do not penalize consumers in cases of fraud.

Credit card companies do not penalize consumers in cases of fraud.

Credit card companies know when charges are not made by the consumer.

Credit card companies know when charges are not made by the consumer.

Federal law states that credit card companies must collect that amount from consumers.

Answer 1

Federal law regulates a consumer’s liability for fraudulent charges.

Under federal law (Truth in Lending/related consumer protections), a cardholder’s liability for unauthorized credit‑card use is limited to $50 (and many issuers waive even that).