15 USCS § 1643 sets forth the limits on liability of a cardholder. According to the statute, a cardholder shall be liable for the unauthorized use of a credit card only if:
- the card is an accepted credit card;
- the liability is not in excess of $50;
- the card issuer gives adequate notice to the cardholder of the potential liability;
- 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 on a separate notice accompanying such statement;
- 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
- the card issuer has provided a method whereby the user of such card can be identified as the person authorized to use it.
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 have been met.
A cardholder incurs no liability from the unauthorized use of a credit card, except as provided in the statute.