Question

Malaysia had $750 in a checking account when the debit card was stolen. A thief made $725 in purchases with the card. How much could have been saved by reporting the stolen card immediately rather than waiting more than 60 days before reporting the theft?

A) $0
B) $725
C) $725 plus potential overdraft fees
D) $750

Answer 1

By not reporting the theft immediately and waiting more than 60 days, the student stands to lose $725 plus any potential overdraft fees due to unauthorized purchases made by the thief.

Step-by-step explanation:

If a student had $750 in a checking account and a thief made $725 in purchases with a stolen debit card, the amount that could have been saved by reporting the stolen card immediately is $725. If the theft is reported within two days, federal law stipulates that the cardholder is only liable for at most $50 of unauthorized charges. However, the liability could be up to the full amount of the fraudulent transactions if the card is reported as stolen more than 60 days after the statement showing the fraudulent charges is sent. Therefore, the answer is (C) $725 plus potential overdraft fees, assuming the report of the stolen card was made after 60 days.