SmartMoney Blogs

Real-Time Advice
Our real-time advice on how market shifts and news impact you and your money

Are Cardholders Liable for Fraudulent Charges?

Up to 1.5 million cards may be impacted by a data breach at one of MasterCard and Visa’s third-party processors. For individuals, data breaches are often far less scary than they sound — at least for credit cards.

Consumers are actually well-protected against fraudulent credit card charges. In general, card issuers hold customers liable for up to $50 of unauthorized credit card transactions and often times they waive that as well, says Carol Kaplan, a spokeswoman for the American Bankers Association. In this case, if it was strictly credit-card information that was compromised, consumers won’t be on the hook for charges they didn’t make.

However, when a data breach involves debit cards, consumers could be at a much greater risk. With debit-card breaches, protections are minimal and consumers are advised to contact their card issuer quickly. Consumers who wait more than 60 days after receiving a checking account statement that shows fraudulent withdrawals could be at risk of losing hundreds of dollars. In the worst-case scenario, they could lose all the money in their account, says Jay Foley, identity theft expert and founder of the ID Theft Info Source, a consulting firm.

A Visa spokesperson says the company has provided card issuers with the affected account numbers “so they can take steps to protect consumers through independent fraud monitoring and, if needed, reissuing cards.” MasterCard didn’t respond immediately to requests.

For now, consumers should contact both their credit and debit card issuers to confirm their cards haven’t been compromised. They should also review their checking account regularly online to make sure fraudulent withdrawals aren’t occurring.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (2 of 2)

View all Comments »
    • Go to this reviewed site…


    • The simple answer, No; it’s the merchant that has to be careful of, in particular, “card not present” transactions.

      Anyway, if in doubt, there’s always John Donahoe’s new “PayPal Payments”.

      The fact is the eBay marketplace has been dead in the water since John Donahoe started his “destructive renovations” in 2007, and eBay certainly is all about the newly renamed “PayPal Payments” now!

      And just for a laugh, some serious analyses of PayPal’s clunky off-eBay products: “The New Way To Pay In-Store”, PayPal Here, SmartPay, PayPal Digital Wallet, PayPal Debit MasterCard, PayPal Local and Watch With eBay …

      eBay / PayPal / Donahoe: Dead Men Walking

About Real-Time Advice

  • How breaking news — in the markets, Washington, and around the world — affects you and your money. Have a question about how current events may change your financial future? Email us at