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Change in MasterCard Zero Liability Rule

Posted on: Aug 19, 2014


Change in MasterCard Zero Liability Rule


The following revisions to the rule are effective October 17, 2014:

-          The rule will apply to all transactions conducted with a MasterCard-branded card, including PIN-based transactions at Point of Sale (POS) and ATM.

-          A cardholder will not be responsible for an unauthorized transaction, as long as the cardholder has exercised reasonable care in safeguarding the card from risk of loss or theft, and, upon becoming aware, promptly reporting the loss or theft to the issuer.  The cardholder could have up to $500 liability if the loss is not reported within two days of discovery or unlimited liability of the unauthorized transaction if not reported within 60 days of when the unauthorized transaction was reported on a periodic statement, thus eliminating the current $50 liability.

-          The rule will continue to apply to cards issued for small business programs, but not to other commercial cards.  In the case of a prepaid card, the rule applies once the cardholder’s identity has been registered with the issuer.


Liability for Unauthorized MasterCard Debit Card Transactions on Cards Issued to

Certain Consumers and Small Businesses.

 The zero liability limit described below only applies to United States-issued MasterCard branded debit cards issued to natural persons, either for consumer purposes or for business purposes if the card is a “small business” debit card described on MasterCard’s website. The zero liability limit described below does not apply if you are an entity of any sort (corporation, limited liability company, partnership, etc.) or if the card is issued to you for business or commercial purposes other than “small business” as defined above. The zero liability limit described below does not apply until your identity is registered by or on behalf of the card issuer.

 Tell us AT ONCE if you believe your MasterCard debit card has been lost or stolen or if you believe any unauthorized transactions have been made using your MasterCard debit card. Your liability for unauthorized use of your debit card with the MasterCard logo will not exceed zero dollars ($0.00) if the following conditions have been met: (in) you have exercised reasonable care in safeguarding your card from risk of loss or theft; and (ii) upon becoming aware of such loss or theft you promptly reported the loss or theft to us.  If the conditions set forth above have not been met, you may be liable for unauthorized transactions to the extent allowed under applicable law. To notify us of lost or stolen cards, or of unauthorized transactions, call us at 406-222-2265 or write to us at:  American Bank, Attention:  Central Operations, PO Box 2290, Livingston, MT 59047-4711. This will help prevent unauthorized access to your account and minimize any inconvenience.




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