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Notice of Change to MasterCard® Rules for Cardholder Liability for Unauthorized Transfers

MasterCard® has announced changes to its rules limiting cardholder liability for unauthorized transfers. The MasterCard® limitations on liability for unauthorized transfers are in addition to limitations on liability established by federal law. The MasterCard® changes become effective on October 17, 2014.

As a result of these changes:

  • The MasterCard® limitations will apply to all transactions conducted with a MasterCard® branded card, including PIN-based transactions [Note: PIN-based transactions are not covered by the current rule].
  • It is no longer a condition for $0 liability that you have not reported two or more incidents of unauthorized use in the preceding twelve months or that the account to which the unauthorized transaction is posted is in good standing.
  • You must promptly notify us upon becoming aware of a loss or theft as a condition for $0 liability.
  • If you do not exercise reasonable care to safeguard your card from the risk of loss or theft or you do not promptly notify us of a loss or theft, the MasterCard® limitations on liability will not apply - limitations established by law may still apply [Note: the MasterCard® $50 liability limit that currently applies if the conditions for $0 liability are not met is eliminated by these rule changes].
  • The MasterCard® rule that defines “unauthorized use” has been removed. [Note: “Unauthorized transfer” is defined by federal law to be: an electronic fund transfer from a consumer’s account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated:
  1. By a person who was furnished the access device to the consumer’s account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized;
  2. With fraudulent intent by the consumer or any person acting in concert with the consumer; or
  3. By the financial institution or its employee.]

For your convenience, the following is a disclosure of the limitations established by law and by MasterCard® that will be effective on October 17, 2014

Consumer Liability for Unauthorized Transfers

Tell us AT ONCE if you believe your card and/or code has been lost or stolen, or if you believe that an electronic fund transfer has been made without your permission using information from your check. Telephoning is the best way of keeping your possible losses down. You could lose all the money in your account (plus your maximum overdraft line of credit). If you tell us within 2 business days after you learn of the loss or theft of your card and/or code, you can lose no more than $50 if someone used your card and/or code without your permission. Also, if you do NOT tell us within 2 business days after you learn of the loss or theft of your card and/or code, and we can prove we could have stopped someone from using your card and/or code without your permission if you had told us, you could lose as much as $500. Also, if your statement shows transfers that you did not make, including those made by card, code or other means, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had told us in time. If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the time periods.

Additional Limits on Liability for MasterCard® Debit Card Cardholders

You will not be liable for any unauthorized transactions using your MasterCard® debit card if: 

  • You can demonstrate that you have exercised reasonable care in safeguarding your card from the risk of loss or theft, and 
  • Upon becoming aware of a loss or theft, you promptly report the loss or theft to us. 
MasterCard® is a registered trademark of MasterCard® International Incorporated.