Unauthorized Use

Use of a Credit Card by someone other than the authorized cardholder, for example, after a bank credit card has been lost or stolen and purchases not approved by the cardholder are charged to the account. Federal Reserve Regulation Z limits the cardholder's liability in such situations to not more than $50, although many banks waive even the $50 fee because attempting to collect such a token amount is usually not worth the effort. The Truth in Lending Act limits credit card issuance to consumers who have filled out an application, or have responded to a direct mail invitation to apply for a credit card. See also Unauthorized Transfer.