§1643 — Title 15 Commerce and Trade | U.S. Code

Summary

Limits a cardholder’s responsibility for unauthorized credit‑card charges to $50 if these things are true: the card is an accepted credit card; the issuer warned the holder and told how to report loss or theft (on the bill or a separate notice); the fraud happened before the issuer was told; and the issuer provided a way to identify the authorized user. A report counts when reasonable steps were taken, even if no employee actually gets it. If the issuer sues, it must prove the charge was authorized or that these conditions were met. The rule does not make a cardholder owe more than other laws or agreements; otherwise the cardholder has no liability.

Title 15, §1643

Commerce and Trade — Source: USLM XML via OLRC

(a)(1)A cardholder shall be liable for the unauthorized use of a credit card only if—

(A)the card is an accepted credit card;

(B)the liability is not in excess of $50;

(C)the card issuer gives adequate notice to the cardholder of the potential liability;

(D)the card issuer has provided the cardholder with a description of a means by which the card issuer may be notified of loss or theft of the card, which description may be provided on the face or reverse side of the statement required by section 1637(b) of this title or on a separate notice accompanying such statement;

(E)the unauthorized use occurs before the card issuer has been notified that an unauthorized use of the credit card has occurred or may occur as the result of loss, theft, or otherwise; and

(F)the card issuer has provided a method whereby the user of such card can be identified as the person authorized to use it.

(2)For purposes of this section, a card issuer has been notified when such steps as may be reasonably required in the ordinary course of business to provide the card issuer with the pertinent information have been taken, whether or not any particular officer, employee, or agent of the card issuer does in fact receive such information.

(b)In any action by a card issuer to enforce liability for the use of a credit card, the burden of proof is upon the card issuer to show that the use was authorized or, if the use was unauthorized, then the burden of proof is upon the card issuer to show that the conditions of liability for the unauthorized use of a credit card, as set forth in subsection (a), have been met.

(c)Nothing in this section imposes liability upon a cardholder for the unauthorized use of a credit card in excess of his liability for such use under other applicable law or under any agreement with the card issuer.

(d)Except as provided in this section, a cardholder incurs no liability from the unauthorized use of a credit card.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1980—Subsec. (a). Pub. L. 96–221 revised existing provisions into pars. (1) and (2) and, as so revised, in par. (1) made changes in structure and phraseology and revised means of notice and verification, and in par. (2) made changes in phraseology.

Statutory Notes and Related Subsidiaries

Effective Date

of 1980 AmendmentAmendment by Pub. L. 96–221 effective on expiration of two years and six months after Mar. 31, 1980, with all

Regulations

, forms, and clauses required to be prescribed to be promulgated at least one year prior to such

Effective Date

, and allowing any creditor to comply with any

Amendments

, in accordance with the

Regulations

, forms, and clauses prescribed by the Board prior to such

Effective Date

, see section 625 of Pub. L. 96–221, set out as a note under section 1602 of this title.

Effective Date

Pub. L. 91–508, title V, § 503(2), Oct. 26, 1970, 84 Stat. 1127, provided that: “section 133 of such Act [this section] takes effect upon the expiration of 90 days after such date of enactment [Oct. 26, 1970].”

§1643 Liability of Holder of Credit Card

Summary

Title 15, §1643

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Regulations

Effective Date

Amendments

Regulations

Effective Date

Effective Date

Citations & Metadata