Safe Spending

As of September 1, MasterCard's U.S. small-business customers will enjoy zero liability--a level of fraud protection their consumer cardholder counterparts have had for 12 years.

"Small-business owners were not always clear about what level of protection they were getting," explains Bruno Perreault, group head of global small-business and midsize enterprises for MasterCard Worldwide. "We decided to introduce zero liability to alleviate concern and to assure small-business cardholders that they are protected from misuse of the card at all times."

By protecting cardholders from responsibility for any charges incurred by an unauthorized individual, zero liability removes a reservation some entrepreneurs have had about using business rather than personal cards for their business-related purchases and expenses. "It gives small-business owners another reason to use a business card. They are afforded the same protection [as consumers] and are able to improve record-keeping," says Perreault.

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Cardholders, however, are charged with "exercising reasonable care in safeguarding their cards," as well as with alerting their issuing bank to any loss, theft or unauthorized usage. What is reasonable care? "The cardholder should take appropriate action to carry the card with them and to look at their statement to identify potential [fraud]," says Perreault. "You don't, for example, want to write your PIN on your card."

Jennifer Pellet is a New York City freelance writer specializing in business and finance.