US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC1643]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                       Part B--Credit Transactions
 
Sec. 1643. Liability of holder of credit card


(a) Limits on liability

    (1) A cardholder shall be liable for the unauthorized use of a 
credit card only if--
        (A) the card is an accepted credit card;
        (B) the liability is not in excess of $50;
        (C) the card issuer gives adequate notice to the cardholder of 
    the potential liability;
        (D) the card issuer has provided the cardholder with a 
    description of a means by which the card issuer may be notified of 
    loss or theft of the card, which description may be provided on the 
    face or reverse side of the statement required by section 1637(b) of 
    this title or on a separate notice accompanying such statement;
        (E) the unauthorized use occurs before the card issuer has been 
    notified that an unauthorized use of the credit card has occurred or 
    may occur as the result of loss, theft, or otherwise; and
        (F) the card issuer has provided a method whereby the user of 
    such card can be identified as the person authorized to use it.

    (2) For purposes of this section, a card issuer has been notified 
when such steps as may be reasonably required in the ordinary course of 
of business to provide the card issuer with the pertinent information 
have been taken, whether or not any particular officer, employee, or 
agent of the card issuer does in fact receive such information.

(b) Burden of proof

    In any action by a card issuer to enforce liability for the use of a 
credit card, the burden of proof is upon the card issuer to show that 
the use was authorized or, if the use was unauthorized, then the burden 
of proof is upon the card issuer to show that the conditions of 
liability for the unauthorized use of a credit card, as set forth in 
subsection (a) of this section, have been met.

(c) Liability imposed by other laws or by agreement with issuer

    Nothing in this section imposes liability upon a cardholder for the 
unauthorized use of a credit card in excess of his liability for such 
use under other applicable law or under any agreement with the card 
issuer.

(d) Exclusiveness of liability

    Except as provided in this section, a cardholder incurs no liability 
from the unauthorized use of a credit card.

(Pub. L. 90-321, title I, Sec. 133, as added Pub. L. 91-508, title V, 
Sec. 502(a), Oct. 26, 1970, 84 Stat. 1126; amended Pub. L. 96-221, title 
VI, Sec. 617, Mar. 31, 1980, 94 Stat. 182.)


                               Amendments

    1980--Subsec. (a). Pub. L. 96-221 revised existing provisions into 
pars. (1) and (2) and, as so revised, in par. (1) made changes in 
structure and phraseology and revised means of notice and verification, 
and in par. (2) made changes in phraseology.


                    Effective Date of 1980 Amendment

    Amendment by Pub. L. 96-221 effective on expiration of two years and 
six months after Mar. 31, 1980, with all regulations, forms, and clauses 
required to be prescribed to be promulgated at least one year prior to 
such effective date, and allowing any creditor to comply with any 
amendments, in accordance with the regulations, forms, and clauses 
prescribed by the Board prior to such effective date, see section 625 of 
Pub. L. 96-221, set out as a note under section 1602 of this title.


                             Effective Date

    Section 503(2) of Pub. L. 91-508 provided that: ``Sect