If financial institutions establish that unauthorized transactions would not have occurred due to timely reporting, what is true about consumer liability?

Consumer liability for unauthorized transactions, as it relates to the timely reporting of such transactions, is influenced by the timing of the consumer's notification to the financial institution. Under the Electronic Fund Transfer Act (EFTA) and Regulation E, consumers are generally protected from liability if they report unauthorized transactions in a timely manner.

When unauthorized transactions are reported within two business days, the consumer's liability is limited to $50. If the consumer waits longer, specifically beyond two business days after learning of the unauthorized transactions, their liability can increase. If they fail to report for more than 60 days after the financial institution sends a statement reflecting the unauthorized transactions, consumers could be liable for the entire amount of those transactions.

Thus, consumer liability can indeed be higher than $50, depending on the timing of the reporting. Therefore, it is correct to state that liability can be higher depending on circumstances, as it varies based on when the consumer reports the unauthorized transaction. This reflects the principle that timely reporting is crucial in limiting liability for unauthorized transactions.