Defendant Robert Martin gave his American Express credit card to McBride, a business associate, for use in a joint venture. McBride retuned the card to Martin and then disappeared. Martin claimed that he had orally authorized McBride to charge up to $500, but McBride charged about $5300 . Is Martin liable for $50 or $5300? Explain
Martin is liable to American Express for $5,300 . The Credit Card Act of 1970 protects the cardholder from the unauthorized use of his or her credit card with a statutory liability of $50 if statutory conditions are present. The provision for limited liability under the statute does not apply when another person is given permission to use the card. Protection is warranted where the card is obtained from the cardholder as a result of loss, theft or wrongdoing, but not where a cardholder voluntarily and knowingly allows another to use his card and that person subsequently misuses the card.
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