Which of the following is true about cardholder fraud involving lost or stolen cards?

In the context of cardholder fraud involving lost or stolen cards, it is mentioned that the cardholder often reports the card as lost while continuing to use it. This highlights a common scenario where the cardholder may not be fully aware or may forget to report the loss immediately, potentially leading to unauthorized transactions occurring before the cardholder takes action.

Understanding this behavior is crucial in recognizing the process of how fraud can manifest when a cardholder does not promptly report a card that is lost or stolen. Fraudulent activity can continue until the cardholder has informed their bank or card issuer, which can lead to significant implications for both the cardholder and the financial institution involved.

This option sheds light on the nature of user behavior in these situations and indicates that prompt reporting can be a critical factor in mitigating further losses. Thus, it reflects a realistic scenario that captures the dynamics of cardholder actions in instances of lost or stolen cards.