Electronic Banking

Electronic Banking

You’re out of cash and out of time, because it is 9:45pm and the bank is closed.  But this doesn’t have to mean that you’re out of luck.  The backbone of today’s economic structure is technology.  And, from the days of the very first computer right up to the present time, the great promise that every small change in technology offers only helps strengthen and improve our great way of life. For banking consumers this translates into electronic banking.  You get access to your cash at any time and on any day.  Automated banking means that a machine does all the work.  There doesn’t have to be a teller present; and if there isn’t a teller than that means there aren’t any pesky labor laws with all these rules that while get in between you and the cash that you crave so dearly.  Machines don’t get holidays and you don’t have to care about how many hours in a row they have to work, day or night! The way it works is that your funds are transferred by communication between two or more computers.  Electronic banking, also known as electronic fund transfer (EFT), uses hard-working and tireless technology in order to get around having to rely on paper records in order to do the banking.  The electronic account information transfer system just lets things happen more quickly by getting the information from place-to-place sooner than if you wait for the paper items to have to arrive.

Some General Guidelines:

To understand your legal rights and responsibilities regarding your EFT account, read the documents you receive from the financial institution issuing your card.  When they send you your personal identification number (PIN) keep that a secret from everyone except your most trusted confidants.  No one should know your PIN except you and select employees of the financial institution.

Also, before getting any EFT service make sure that you know how much protection you have against unauthorized transfers, the contact information for anyone who you have to report unauthorized activity to, fees and costs for the transfers you are allowed to make, how to stop payment if you need to, the steps you should take if you find something wrong on your statement or activity report, the duty the bank owes you if they don’t stop a transaction as you instructed and when the bank will give your confidential information to other third parties without your prior consent. Finally, retain your EFT receipts so that you can compare them with your periodic statements.  You do this for your checking account anyway, so the procedure should be entirely familiar.  By doing this you will be able to best protect yourself by discovering fraud and thereby limiting losses but you should also be able to use this information to help you make your best case in the event of a dispute.

Federal Rules:

The federal Electronic Fund Transfer Act (EFT Act) is one of the laws that covers electronic consumer transactions at the federal level.  Its goal is the fair and responsible management of the electronic commerce.  There are two major areas of concern for the consumer that the law applies to, incorrect information and lost or stolen cards.

Reporting Errors:

You have 60 days to notify your financial institution if there was a problem with your statement.  The best way to protect yourself if an error occurs is to notify the financial institution by certified letter, return receipt requested, so you can prove that the institution received your letter. Keep a copy of the letter for your records.  Make sure that you do this because if you fail to notify the institution of the error within 60 days the federal law releases the institution of any duty to investigate the matter for you.

As long as you tell the bank about the error it must begin to look into your statement in 10 days. Then the bank normally has 3 days after it is done to tell you what they found out.  If the institution needs more time it may take up to 45 days to complete the investigation – but only if the money in dispute is returned to your account and you’re notified promptly of the credit.  Then when their done the bank must either give you the money or, if they say there is no error and decide to keep your cash, they must tell you in writing why they’re keeping your money. Commercial credit card issuers have 10 business days after you tell them about the error, or it can petition for up to 90 days, to complete an investigation. If no error is found at the end of the investigation, the institution must either give you back the money or give you a written explanation. Also keep in mind that some card issuers have their own warranty and purchaser protection periods.  Never forget to bend their ear because they are often quicker and more apt to hear.

Lost or Stolen ATM or Debit Cards:

Charges to your lost or stolen credit card cannot exceed $50. Theft or loss of an ATM or debit card can result in significant economic loss.  There are rules to follow or only the devil to pay, so listen up!

• You can’t be held responsible for any unauthorized use of your. ATM or debit card if you report it is missing prior to its use.
• But if the unauthorized use occurs before you report it, the amount you can be held responsible for depends on when you report the loss to the card issuer.
• If you report the loss within two business days after you realize your card is missing loss is limited to $50.
• If you report its loss after two days but before 60 days after your statement is mailed to you your liability tops out at $500 for unauthorized transfers.
• If you fail to report an unauthorized transfer within 60 days after your statement is mailed to you, you risk unlimited loss. That means you could lose all the money in your account and the unused portion of your maximum line of credit established for overdrafts.
• The only way to avoid the operation of these time limits is if you can demonstrate some valid reason, like sickness or serious injury that stopped you from doing your duty under the rules.
• Also, state law or the contract can set lower liability limits for you and those lower limits will apply instead of those in the federal EFT Act.

Once you report the loss or theft of your ATM or debit card, you’re no longer responsible for additional unauthorized transfers occurring after that time. Because these unauthorized transfers may appear on your statements, however, you should carefully review each statement you receive after you’ve reported the loss or theft. If the statement shows transfers that you did not make or that you need more information about, contact the institution immediately, using the special procedures provided for reporting errors as stated above. The ability to stop payment under the EFT Act is severely limited.  EFT transfers are designed to be as quick and as effective as cash sales so that it’s up to you to resolve any problems you encounter with the seller and get your money back yourself.  You cannot stop payment in electronic funds transfer land except in cases where you’ve prearranged payment from your account and you let the institution know before they pay. Although federal law provides only limited rights to stop payment financial institutions or state laws may offer more rights.  Check into it and see if you can’t get what you need.
Finally, the EFT Act prohibits financial institutions from requiring you to repay a loan by electronic transfer and you have the right to choose your institution if you’re required to receive your salary or government benefit check by EFT.

EFT Tips:

If you decide to use EFT:

• Take care of. Know where your ATM or debit card is at all times;
• if you lose your ATM or debit card it report it as soon as possible.
• Choose a PIN for your ATM or debit card that makes it difficult for a thief to use your card.
• Keep and compare your receipts for all types of EFT transactions with your periodic statements and report errors promptly.
• Make sure you know and trust a merchant before you share any bank account information or pre-authorize debits to your account.

But be forewarned that these rules do not go to all cases that are common today.  The act does not cover any prepaid balance cards, such as phone cards and many types of store gift cards and certificates we see around so much today.  While these may operate electronically they may not be covered by the act so that the rules designed to protect the consuming public may not be in effect.