As with credit cards, you are not liable for any charges made after you report the loss or theft of your card. However, the notice requirements are more strict. Once an unauthorized charge has been reported to you on your bank statement, you can be liable for the full amount if you do not report the charge within 60 days of the date the statement was sent to you. This generally will include mail or telephone purchases made from your home or business. This means that if you have paid the charge in full, you cannot recover any portion of the charge from the credit card company.
Federal law puts the credit card company in the merchant's shoes.
If the merchant has a defense against your claim, then so does the credit card company. If you disagree with the credit card company's decision, you can take the credit card company to court just as you could the merchant. Your best protection is to keep unauthorized people from handling your credit cards or learning your account numbers. By doing so you can tell as soon as possible if someone is making unauthorized charges. It is particularly important with ATM cards, because you may be liable for all charges if you do not report the loss quickly.