What is a financial institution's liability for unauthorized credit card use?

In Alaska, a financial institution’s liability for unauthorized credit card use is typically based on the Fair Credit Billing Act (FCBA). The FCBA is a federal law that provides protection for consumers who have been victimized by credit or charge card fraud. Under this law, a financial institution is liable for any unauthorized use of a card, up to a certain amount. In general, if a cardholder notifies the financial institution within 60 days of the date the statement was sent, then they cannot be held responsible for any unauthorized charges. However, if the cardholder fails to report the incident in this timeframe, their liability is limited to $50. If the cardholder suspects that their card or number were stolen, but they did not receive an account statement, then the liability is capped at $500. Additionally, if the cardholder notifies the financial institution after the 60-day period, then the institution is only liable for the lesser of $500 or the amount of the unauthorized charges. However, if the cardholder’s delayed notification was due to extenuating circumstances, such as a long illness, the institution may have greater liability. Ultimately, it is important for cardholders to be aware of the law and understand their rights and responsibilities. It is also important that cardholders take all necessary steps to protect their cards and account numbers from unauthorized use.

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What is a financial institution's liability for unauthorized credit card use?

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