47-22-204 - Effect of termination of account Effective date Liability. - Tennessee Statutes

47-22-204. Effect of termination of account Effective date Liability.

(a)  Termination by a cardholder of an account is effective on the second business day (as to the card issuer) following delivery to the issuer of the notice of termination or on such later date as is specified in the notice. From and after termination, no cardholder or card user may initiate transactions under the account, and each cardholder, other than the terminating cardholder, and each card user shall surrender all cards in that person's possession or control to the issuer immediately upon receiving a copy of the notice of termination.

(b)  Termination of an account relieves the issuer of any obligation to extend credit in a card transaction under the account regardless of when the transaction is initiated and, except as provided in subsection (c), relieves each cardholder of any further liability respecting the account.

(c)  Notwithstanding termination, each cardholder is liable for:

     (1)  All transactions initiated by any cardholder or card user prior to the effective date of termination;

     (2)  All transactions initiated at any time by or with the authorization of the cardholder against whom the issuer asserts liability, but no cardholder other than the initiating or authorizing cardholder shall be liable for such transaction; and

     (3)  All transactions initiated by any card user at any time.

(d)  The account agreement shall remain applicable to any transaction initiated on or after the termination date for which a cardholder is liable, except that the outstanding balance of all such transactions shall, unless the issuer elects otherwise, be due and payable in full.

[Acts 1989, ch. 216, § 5.]