Question

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:

Answer 1

Cristina may not be held liable for the unauthorized charges on her lost credit card under the Truth-in-Lending Act, as she quickly reported the loss and the card lacked verification means.

Step-by-step explanation:

Under the Truth-in-Lending Act, Cristina's liability for unauthorized charges on her credit card is limited to $50 if she reports the loss before the card is used. However, if the card is used before she reports it, she may not be liable for any amount if the card does not have a means for the retailer to verify the holder's authorization to use it. Since Cristina reported the loss as soon as she discovered her card was missing, and given the card's lack of verification means, she will potentially not be held liable for the unauthorized charges under the Act.