Remember the days of driving to the bank to make a withdrawal from a teller so you would have cash for the weekend? Those days are long gone for most of us, but the ease and convenience of electronic banking also present additional risks to the security of your accounts and your money. Fortunately, consumers are offered some protections under the Federal Electronic Funds Transfer Act (EFTA) of 1978. Managed by the Federal Reserve Board, the EFTA grants certain rights and responsibilities to consumers who use electronic banking services.
Electronic Banking Can Lead to Problems
There are many ways we engage in electronic banking, also known as Electronic Fund Transfer (EFT), and, while each provides convenient money management tools, each also presents opportunities for fraud and theft. Some of the more common EFT services include ATMs, direct deposit, online banking, and debit card purchases. When problems occur with these services, the EFTA guarantees certain rights to protect you, including the following:
Errors. If you find an error on a bank statement related to a direct deposit, debit card transaction, or any other transaction, you have 60 days from receipt of the statement to notify the bank. They then have 10 business days to investigate the error and one business day to correct the error if it is verified as a legitimate error. In some cases, banks are granted up to 45 days to investigate, but the money in dispute must be credited back to you in the meantime.
Lost or stolen cards. If you report an ATM or debit card as lost or stolen before an unauthorized transaction has occurred, you are not responsible for any money taken from your account. If you report the card within two business days after you realize it is missing, you cannot be held responsible for more than $50. If you don’t report the missing card for 60 days, you can be held responsible for up to $500. However, if you don’t report the stolen card at all, you will not be refunded any amount stolen from your account.
Overdrafts. If you make a purchase with your debit card and do not have sufficient funds in your account to cover it, your bank can cover the overdraft and charge you a fee for the service only if they have your permission to do so. If you have not agreed to this service and fee, the bank should simply decline the payment.
Stop-payment. Unlike with some credit cards, if you purchased something with a debit card that turned out to be defective, or something you ordered was not received, you cannot stop payment on the purchase. When you use a debit card to pay for something, it is treated as if you paid cash.
While many of us are guilty of not reading the fine print when we open a bank account, this is where these rights and responsibilities should be explained to you. If you believe a bank has failed to uphold these rights, you may be able to take legal action. Call The Consumer Law Group to find out more.