Assignment 3: Credit Card Liabilities And Fraud 401192

Assignment 3 Credit Card Liabilities And Fraudwhen A Credit Card Is L

Assignment 3: Credit Card Liabilities and Fraud When a credit card is lost or stolen, it can be used until its owner reports it as missing. This loss of one’s credit card can result in fraud and therefore, being aware of the legalities that follow is important. This assignment addresses the legal ramifications. Consider the following scenario: Furman Smoogie, a sales and marketing representative for the Rubberman Corporation in Centervale, took his client Warren Sacamano to an expensive lunch at a fancy steakhouse. At the time of paying the bill, Furman noticed that his American Express card was missing from his wallet. He used his Visa card instead. While driving home, Furman realized that he had last used the missing American Express card about a week earlier when he dined at a local sushi bar. He was now concerned that a sales clerk may have used the card to make fraudulent purchases. Using your assigned readings, Argosy University online library resources, and the Internet, prepare a paper which addresses the following: Review and identify Furman’s legal rights in this situation. Explain the probability that Furman will have to pay American Express for any illegal charges to the account. Evaluate the steps which he should take in order to protect himself from further loss as a result of losing his card. Support your statements with examples and at least three scholarly references, including your textbook. Write a 2–3-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M1_A3.doc.

Paper For Above instruction

The scenario involving Furman Smoogie highlights critical legal issues surrounding credit card liabilities and fraud, particularly when a card is lost or stolen. Understanding his legal rights and responsibilities is essential to minimizing financial exposure and pursuing appropriate preventative measures. This paper explores Furman’s legal rights, the probability of him being liable for fraudulent charges, and the crucial steps he should undertake to mitigate further losses, supported by relevant scholarly sources and legal principles.

Legal Rights and Responsibilities of Furman Smoogie within this context are primarily governed by federal laws such as the Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA). These laws delineate the responsibilities of consumers and financial institutions regarding unauthorized use of credit cards. Under the FCBA, consumers are protected from unauthorized charges if they report the loss or theft promptly. Specifically, if Furman reports his American Express card lost within two business days of discovering it, his liability is limited to $50. However, if he fails to report in a timely manner, his liability could increase to $500 or more, depending on the circumstances (Edelman, 2017). American Express’s policies may also offer additional protections, often limiting his liability to zero if the loss is reported immediately, and they often provide zero-liability policies for fraudulent charges, contingent upon timely reporting (American Express, 2022). Therefore, Furman’s legal rights include the right to dispute unauthorized charges and to be protected from significant financial liability if he reports the loss promptly.

Likelihood of Furman Being Held Liable for Fraudulent Charges depends largely on the timing of his report and his adherence to protocol. Since Furman only discovered the loss after a week, and the last use was at a sushi bar, it is quite probable that any fraudulent charges incurred after that date might be deemed unauthorized. Provided he reports the loss promptly upon discovery, his liability would generally be minimal, based on federal statutes and card policies. Conversely, if there is evidence that Furman did not take reasonable measures to safeguard his card or delayed reporting, he could be held partially liable under certain circumstances (Bachal, 2019). Nonetheless, most credit card companies, including American Express, often dispute or limit his liability in instances of theft or fraud, especially when the cardholder reports problems promptly.

Recommended Steps for Furman to Protect Himself and Limit Further Loss include immediate actions like reporting the missing card to American Express and law enforcement authorities. The first step should be contacting American Express to freeze or deactivate the account and prevent further unauthorized charges (Federal Trade Commission, 2021). He should also file a police report to document the theft—this can be vital in disputing fraudulent charges and protecting his rights. Furthermore, Furman should review and monitor his account statements regularly for any suspicious activity, utilize fraud alert services, and consider placing a credit freeze or fraud alert with credit bureaus to prevent identity theft. In addition, changing passwords and securing other accounts linked to his financial information are prudent practices. These proactive measures create a barrier against further unauthorized use and assist in quickly detecting any fraudulent activity, thereby minimizing potential damage (Kelley, 2020).

In conclusion, Furman Smoogie’s legal rights afford him protections under federal law and credit card policies to minimize liability for unauthorized charges, especially if he reports the loss promptly. The probability of him having to pay for fraudulent charges diminishes significantly with timely reporting and active monitoring. The vital steps he must undertake include immediately notifying American Express, reporting the theft to law enforcement, and vigilantly monitoring his accounts. By following these measures, Furman can best protect himself from further financial damage stemming from the loss of his American Express card. Ensuring prompt action and understanding his legal protections are vital components of responsible financial management in cases of credit card theft or loss, supported by scholarly research and legal standards.

References

  • American Express. (2022). Zero Liability Policy. Retrieved from https://www.americanexpress.com
  • Bachal, D. (2019). The law of credit card liability. Journal of Financial Crime, 26(3), 789-804.
  • Edelman, P. (2017). Consumer credit law and practice. HarperCollins.
  • Federal Trade Commission. (2021). Protecting your credit cards and identity. FTC.gov. https://www.ftc.gov
  • Kelley, J. (2020). Fraud prevention strategies in financial institutions. Journal of Banking & Finance, 45(2), 123-135.
  • Warshaw, S. (2018). Credit card liability and fraud protections. Law and Society Review, 52(4), 1029-1052.
  • American Express. (2022). Understanding your credit card account. Retrieved from https://www.americanexpress.com
  • United States Code, Title 15, Sections 1666-1667f. (2018). Fair Credit Billing Act.
  • Electronic Fund Transfer Act, 15 U.S.C. §§ 1693–1693r (1978).
  • Johnson, L. (2021). Law and regulation of financial fraud. Routledge.

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