Lori received a credit card in the mail from a company that had taken her name and address from a white-pages directory without her knowledge. Upset about the unauthorized use of her name, Lori planned to contact the company to lodge a complaint. But before she could do that, her roommate stole the card and charged thousands of dollars’ worth of merchandise to it without Lori’s knowledge. The card issuer claimed that Lori was fully responsible for the purchases, while Lori claimed that she should have no liability whatsoever for the purchases.
If the card issuer sues Lori, who might the court rule in favor of and why?
The court might rule in favor of the complainant since Lori did not report a lost card immediately. It is always advisable to report a stolen or lost card the very minute you notice it is missing. This is practically possible since the issuing card companies have 24hr phone service and they have provided the number at the back of the card, so one is supposed to have copied the number or use internet to reach to the issuing company. Lori was also supposed to file a complaint with FTC immediately upon receiving the card which she had not requested.
• Does the Federal Trade Commission (FTC) offer any protection to Lori?
Under federal law if unauthorized transactions are made with ones card the customer cannot be held responsible for more than USD 50.Incase it is reported before any charges are made then the customer have no liability. According to FCBA the card issuer cannot hold you liable for unauthorized charges.
• What ethical issues are raised by the card issuer’s conduct?
Integrity lacked on the part of the issuing company. This is because they used information intended for other purposes to process a card that the customer was not even aware of. They also made the information contained in the white pages to lack confidentiality. Compliance lacked with the issuing company as the customer is supposed to have signed during the booking. It is also violation of law to produce an identification document either knowingly or unknowingly without consent from the customer.