Which law limits the liability for unauthorized use of a credit card to a maximum of $50,000 per transaction?

The correct answer is that both the Fair Credit Billing Act and the Consumer Credit Protection Act play a role in limiting the liability for unauthorized use of credit cards.

The Fair Credit Billing Act provides mechanisms for consumers to dispute charges and limits the consumer's liability for unauthorized transactions. If a consumer reports the loss or theft of their credit card before any unauthorized charges occur, they are not responsible for any unauthorized transactions. If the card is misused after being reported lost or stolen, liability is capped at $50, which can be lower for certain circumstances.

Similarly, the Consumer Credit Protection Act was designed to protect consumers in their use of credit and ensures that they are not held responsible for more than $50 in unauthorized transactions across diverse financial protections.

Thus, both regulations comprehensively protect consumers against significant losses due to unauthorized use of their credit card, reinforcing the protection that the consumer has when fraudulent transactions take place.