What Is a Zero Liability Policy?

A credit or debit card’s zero liability policy means the cardholder is not liable or financially responsible for unauthorized charges in most cases. Credit card issuers typically provide stronger protection, though terms may vary. Many debit cards offer zero liability as well. It’s important to understand the limits set by federal law and if the issuer provides m🌳ore coveragꦺe. 

How Zero Liability Policies Work

In general, zero liability policies reimburse you for charges when others use your credit card for without your permission. Zero liability policies may apply to personal and business accounts, debit cards, and credit cards.

The bank will investigate any claim you make of unauthorized use and it's possible your claim may not be valid. For example, if the bank finds that an 澳洲幸运5官方开奖结果体彩网:authorized user used your account without your approval, the zero liabilityꩲ claim may not be valid.

While the bank investig🍸ates the fraud, it will likely offer a temporary credit within a few days after you make the claim.

Zero Liability Policy Requirements

Ze♒ro liability policies frequently have exception𒀰s. The cardholder agreement should specify these exceptions, so read it carefully.

You might not be covere♛d by your zero liability policy if you: 

• Weren’t responsible in handling your account or card.
• Gave someone else (even a family member or friend) your card, card number, or PIN.
• Took too long to report unauthorized transactions; your bank will lay out its reporting requirements.
• Don’t cooperate with the investigation, which may involve filing a police report.

Credit Cards

Credit cards offer 澳洲幸运5官方开奖结果体彩网:better fraud protection than debit cards. According to federal law, credit card issuers are responsible for covering the costs associated with 澳洲幸运5官方开奖结果体彩网:fraudulent credit card charges.

If you notice and report a charge that doesn’t belong on your credit card, you aren’t liable for any charges. But if you fail to report the fraud on time, you may need to pay a maximum of $50 toward the charges.

Debit Cards

Debit cards are subject to a different set of federal rules. With debit cards, your responsibility is determined by how soon you reported the fraud and whether the physical card or card number was involved. Here’s are come key federal protection rules:

• If a debit card you already reported as lost or stolen is used for fraudulent charges, your liability is $0.
• If you report the card lost or stolen within two business days of the fraud, your liability is limited to $50.
• If it takes you longer than two days to report the loss, the maximum liability is $500 during the first 60 calendar days after the bank statement is made available.
• Beyond 60 days, all your money in that account and linked accounts could be vulnerable. 

If your physical card wasn’t used to commit the 澳洲幸运5官方开奖结果体彩网:debit card fraud—just the card number—you have up to 60 days from your statement mailing date to report the incident before you are liable.

However, debit card issuers may voluntarily o🦂ffer zero liability policies that are more consumer-friendly than federal protections.

Zero Liability Policy Examples

Bank of America 

Bank of America offers a $0 Liability Guarantee for account holders, which covers fraudulent transactions made by others using your Bank of America debit and credit cards. For this coverage, you must report transactions made by other people promptly. However, you are not allowed to share personal or account information with anyone.

Chase

澳洲幸运5官方开奖结果体彩网:Chase bank also offers Zero Liability Protection. This policy fully reimburses unauthorized debit card transactions if account holders report fraud promptly. Chase defines “promptly” as within 60 days for personal accounts and 30 days for business accounts.

Capital One 

If your 澳洲幸运5官方开奖结果体彩网:Capital One Debit Mastercard is lost or stolen, you have no liability for unauthorized charges. Like other banks, Capital One expects you to report fraud as soon as possible after spotting an unauthorized transaction.

Mastercard

澳洲幸运5官方开奖结果体彩网:Mastercard says that cardholders will not be held responsible for unauthorized transactions if "1. You have used reasonable care in protecting your card from loss or theft; and 2. You promptly reported loss or theft to your financial institution." However, this zero liability doesn’t apply to Mastercard payment cards, including unregistered gift cards.

Visa

Visa's Zero Liability Policy replaces funds stemming from an unauthorized credit or debit transaction within five business days after you notify them. Once again, this policy doesn’t apply to anonymous prepaid cards. 

How Fraudulent Card Charges Happen 

Fraudulent charges can appear on a credit or debit card account in a 🧜few different ways, such as through a data breach, skimming, or phishing.

Data Breach

Hackers sometimes access organizations’ databases via a 澳洲幸运5官方开奖结果体彩网:data breach, stealing customer card 🐟information or other personal information.

These numbers are sold on the black market; p🔯urchasing scammers use the numbers to make unauthorized purchases. The fraudsters’ goal is to make card purchases before you report the fraud to your card issuer. 

Skimming 

Through skimming, criminals tamper with a credit or debit card swiping device at an ATM, store, or gas pump to steal card information. T🐲he information is then used to make unauthorized purchases.

Using 澳洲幸运5官方开奖结果体彩网:cards with embedded microchips or mobile w🌳allets can help avoid this situation. When using a machine, inspect it well to ensure no skimmer devices are attached.

Phishing 

Phishing scams use fraudulent emails or texts t🍌hat pretend to be from a trusted company or government agency. Unsuspecting consumers hand over their pers𒅌onal information after requesting a login—but inadvertently submit account information to a fraudster.

The Bottom Line

While federal law provides some liability protections to credit and debit cardholders whose cards, or card numbers, have been used in fraudulent transactions, many card issuers go beyond that. Zero-liability policies help further limit the cardholder's financial exposure, so it’s always good to have one. Just be sure you keep tabs on your accounts so that you can spot fraud and report it immediately.