What is the effect of the Fair Credit Billing Act on a consumer with stolen credit cards?

The Fair Credit Billing Act (FCBA) provides essential consumer protections regarding credit card fraud. Under this act, if a consumer’s credit card is used fraudulently, they are only liable for up to $50 of the unauthorized charges. This liability limit helps protect consumers from significant financial losses stemming from stolen credit cards.

Although consumers may report their stolen credit cards and take steps to prevent further unauthorized use, the law establishes that they can only be held responsible for a maximum of $50. Importantly, this liability applies only when the fraud is reported within a reasonable timeframe—typically within 60 days of the statement showing the unauthorized charges.

In the context of the other options presented, the amount of liability exceeds what the FCBA dictates, which is not aligned with the law’s intention to foster consumer confidence in credit usage. Thus, recognizing the nuance of the protections afforded by the FCBA is crucial for consumers to understand their rights in cases of credit card fraud.