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Fraudulent Transactions - Card Owner’s Liability

Answered by: 
David A. Dickinson

Question: 
We have an elderly lady who is claiming fraud on transactions dating back to April, 2009. We have contacted several of the merchants and have found that the person using her card is her son. What is her liability in this situation? She states that she authorized her son to purchase concert tickets with her card, but that was all.
Answer: 

If she gave him the card and didn't get it back and then he made these "unauthorized transactions", she is liable. See Section 205.2(m)(1). If she gave him the card, got it back and then he stole it to make these unauthorized transactions, her liability could be zero, based on your applicable rules under any vendor agreement and Reg E. He didn't have unlimited, "evergreen" use of the card.

First published on BankersOnline.com 9/14/09

First published on 09/14/2009

Filed under: 
Technology
Filed under technology as: 
Fraud
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