Zero Liability Policy
Candlefocus EditorThe policy applies to practically any form of fraud, from an online purchase to an over-the-counter transaction. All a cardholder needs to do to take advantage of this protection is to contact their credit card issuer as soon as fraud is suspected, usually within 60 days. It is important to remember that it is only valid if the card is reported lost or stolen or if you receive fraudulent charges that appear on your statement.
Under the Federal Trade Commission's (FTC) rules, cardholders will never be held liable for more than their initial $50 in the case of a fraudulent transaction. The FTC also requires issuers to investigate any claims within a timely manner and issue a decision within two business days. While the $50 limitation is legislation-enforced, many credit card companies do not even hold customers liable for the full amount.
Essentially, any personal losses or liability for unauthorized purchases are non-existent for the cardholder and all associated cards are also covered under the policy. However, if you fail to report the fraud within a certain time frame (which can vary from credit card to credit card), you may be liable for more than the exact price of the fraudulent product or service.
This type of policy does not apply if your debit card is stolen or used without your authorization. According to the Electronic Fund Transfer Act (EFTA), your maximum liability for unauthorized use of a debit card is $50. This amount is only valid if it is reported within two business days. If you don't report it within two days, your liability can increase to $500, and if you don't report it within 60 days, you may lose all the money in the account and potentially be held responsible for the entire amount.
It is important to read the terms and conditions associated with your credit or debit card, as well as make sure that you're taking proactive steps to avoid fraud, such as checking physical cards for signs of tampering or keeping an eye out for suspicious purchases or emails. In conclusion, the Zero Liability Policy is a great tool offered by most credit card companies to protect their customers from any fraudulent activity. While it is important to make sure you are taking steps to avoid fraud, such as watching for suspicious activity, this policy can provide cardholders with much-needed protection against any losses incurred. It is important to remember that it does not apply to debit cards, so it is important to read the terms of your agreement to ensure that you are not at risk of substantial liability.