What type of liability does a cardholder face if they do not report a lost debit card promptly?

When a cardholder does not report a lost debit card promptly, they can face unlimited liability for unauthorized transactions that occur on the card after it is lost. Unlike credit cards, which have protections in place that limit the cardholder's responsibility to a certain amount if a card is reported stolen, debit cards can expose the holder to greater risk. If a debit card is reported lost or stolen within two business days, the cardholder's liability is limited to a fixed amount. However, waiting longer than that timeframe can result in the cardholder being held fully accountable for all transactions made after the card was lost. This is why the concept of unlimited liability applies in this scenario; prompt reporting is crucial to protect the cardholder from bearing full financial responsibility for subsequent unauthorized use of the card.