DEFINITION of 'Consumer Liability'
The accountability put on consumers to not act in a negligent way. Consumer liability put on consumers is usually written in the fine print or written contract when transacting with companies. It is a method of companies protecting themselves from the potential negligence of consumers.
BREAKING DOWN 'Consumer Liability'
An example would be the Electronic Fund Transfer Act. It states that consumers may be exposed to limited liability for unauthorized e-fund transfers given certain circumstances. Consumers must also report lost or stolen credit cards within two business days after becoming aware or else the bank is not obliged to refund any losses. Typically it is up to the consumer to inform themselves of his or her potential liability.