If a consumer does not report loss or theft of an access device within two business days, what could be the consequence regarding liability?

If a consumer does not report loss or theft of an access device within two business days, what could be the consequence regarding liability?

• A. Liability will not exceed $50
• B. Liability may exceed $50
• C. Liability will be waived
• D. Liability is fixed at $100

Answer: (B)

When a consumer fails to report the loss or theft of an access device, such as a debit or credit card, within two business days, they may face increased liability for any unauthorized transactions that occur as a result of that loss or theft. If the consumer alerts the financial institution within this two-day timeframe, they are protected under the Electronic Fund Transfer Act, which limits their liability to a maximum of $50. However, if the consumer does not report the loss within the specified period, their liability may increase significantly. This means that they could be held responsible for unauthorized transactions that happen beyond the $50 limit, potentially resulting in higher losses, depending on the number of transactions and the timing of the reports. The law protects consumers by providing specific timeframes for reporting and delineating their liability, which encourages prompt reporting to minimize losses. Thus, it follows that liability may exceed $50 if the consumer does not report the incident within the prescribed two-business-day window.

When a consumer fails to report the loss or theft of an access device, such as a debit or credit card, within two business days, they may face increased liability for any unauthorized transactions that occur as a result of that loss or theft. If the consumer alerts the financial institution within this two-day timeframe, they are protected under the Electronic Fund Transfer Act, which limits their liability to a maximum of $50.

However, if the consumer does not report the loss within the specified period, their liability may increase significantly. This means that they could be held responsible for unauthorized transactions that happen beyond the $50 limit, potentially resulting in higher losses, depending on the number of transactions and the timing of the reports. The law protects consumers by providing specific timeframes for reporting and delineating their liability, which encourages prompt reporting to minimize losses. Thus, it follows that liability may exceed $50 if the consumer does not report the incident within the prescribed two-business-day window.