Under the Fair Credit Billing Act, which of the following is true regarding consumer liability for unauthorized charges?

Under the Fair Credit Billing Act (FCBA), the correct understanding is that consumers are not liable for unauthorized charges. This law provides specific protections for consumers who may encounter fraudulent transactions on their credit accounts. If a consumer reports an unauthorized charge in a timely manner, they should not be responsible for those charges.

The FCBA outlines procedures for consumers to dispute billing errors, which include unauthorized charges, and establishes that liability is limited. In fact, if a consumer reports a stolen card or unauthorized charges, they can be protected from incurring financial losses related to those fraudulent activities.

As a result, the assertion that consumers are not liable for unauthorized charges aligns with the consumer protection goals of the FCBA, which seeks to reduce the financial risk posed to consumers by fraudulent transactions.