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Question 191

Which of the following is/are NOT limitations on liability in EFT?

$150 liability limit if consumer notifies the institution within two business days of discovery of loss or theft of access device, not including the day the consumer learns of the loss or theft

If state law has more generous limitations of liability for the consumer, the state laws will govern

Full liability (up to the amount of the unauthorized transfer) may be imposed if the consumer does not notify the institution within 30 days of the institution's transmission of the statement on which the first unauthorized transfer appears (to raise the liability limit, the institution must first establish that the unauthorized transfers would not have occurred if the consumer had notified the institution within the 30 days). The unlimited liability applies only to the transactions that occur after the 30-day time period

Extenuating circumstances (such as hospital confinements, travel, and so forth) may extend the liability time periods

Correct Answer: A, C

In the context of electronic funds transfers (EFT), limitations on liability are generally governed by specific rules. According to EFT regulations, the liability limit for unauthorized transfers is typically $50 if the consumer notifies the institution within two business days, making the $150 figure in option A inaccurate. Additionally, the consumer has 60 days (not 30 days as mentioned in option C) to report unauthorized transactions to avoid full liability for subsequent transfers. Therefore, these two options contain inaccuracies regarding the actual limitations on liability in EFT.

Discussion

Dex24Options: AC

It is A and C, page 634 of the online book. A should be $50 not $150 and C should be 60 days not 30 days.

Cam22Option: C

Poorly worded question. Fix it! Option C outlines the conditions under which full liability may be imposed on the consumer for unauthorized transfers. It specifies that if the consumer fails to notify the institution within 30 days of the transmission of the statement containing the first unauthorized transfer, the consumer may be held fully liable for subsequent unauthorized transfers.