If a debit card is stolen and reported after 3 days, what is the maximum liability for unauthorized transactions?

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The correct answer is based on the liability limits established under the Electronic Fund Transfer Act (EFTA). When a debit card is stolen and the cardholder does not report the theft within the required timeframe, the liability for unauthorized transactions can increase significantly. Specifically, if the cardholder reports the loss or theft of their debit card after three days but before sixty days, they may be liable for all unauthorized transactions made during that period, with a maximum liability cap of $500.

If the theft is reported more than 60 days after receiving the statement that reflects the unauthorized transactions, the cardholder may be liable for all transactions made after the card was lost or stolen. Therefore, stating that the maximum liability is $500 accurately reflects the limits set under the EFTA for reports made between three and sixty days after the theft occurs.

This knowledge is crucial for understanding consumer protections in transactions involving debit cards and the importance of prompt reporting to minimize potential losses.

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