Asked by Blukey McDowall on May 05, 2024
Verified
Cristina receives a new credit card from Seventh National Bank that does not provide a means for a retailer to verify that the holder of the card is in fact authorized to use it.The next day,Cristina discovers that she has lost her card.As soon as she discovers the card is missing,she calls Seventh National to report the loss.Already,$620 worth of unauthorized charges have been made on her credit card.Under the Truth-in-Lending Act,Cristina will:
A) have to pay for the entire $620 of unauthorized charges.
B) have to pay for $50 of the unauthorized charges.
C) not have to pay any amount of the unauthorized charges.
D) have to pay for 50% of the unauthorized charges.
Truth-in-Lending Act
A U.S. federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.
Unauthorized Charges
Expenses made to a credit card, bank account, or other financial account without the account holder’s approval or knowledge.
Credit Card
A payment card issued by financial institutions allowing the cardholder to borrow funds for purchases or cash advances.
- Acquire knowledge about the responsibilities and entitlements of consumers under laws protecting credit, including the provisions of the "Cooling-Off" Rule and the Truth-in-Lending Act.
Verified Answer
IÖ
Ilgaz ÖndinMay 12, 2024
Final Answer :
C
Explanation :
Under the Truth-in-Lending Act, if a credit card was lost or stolen and unauthorized charges were made, the cardholder's liability cannot exceed $50. However, if the loss or theft was not reported to the credit card issuer, the cardholder's liability can be up to $500. Since Cristina reported the loss as soon as she discovered it, she will not have to pay any amount of the unauthorized charges.
Learning Objectives
- Acquire knowledge about the responsibilities and entitlements of consumers under laws protecting credit, including the provisions of the "Cooling-Off" Rule and the Truth-in-Lending Act.