Know Your Rights - Electronic Financial Fraud
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Author:  ximora [ Sat May 13, 2006 2:45 pm ]
Post subject:  Know Your Rights - Electronic Financial Fraud

Regulation E protects consumers when they are hit by electronic financial fraud

Consumers have well-defined rights with respect to fraudulent electronic transfers, and should generally be able to obtain refunds with little hassle. The rights are spelled out in what's known as "Reg-E," or the Federal Reserve Board's Regulation E. The Fed was authorized to draw up the regulation by the Electronic Funds Transfer Act of 1979. The regulation covers all manner of transfers into and out of bank accounts outside of paper checks, including the use of debit cards. It does not cover credit card transactions.

What's covered
Any transfer initiated through an "electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account." These include point-of-sale transfers, automated teller machine transfers, direct deposits or withdrawals of funds, transfers initiated by telephone, and transfers resulting from debit card transactions, whether or not initiated through an electronic terminal.

Consumer liability
When a debit card or other "acccess device" is lost, such as an online banking password, consumer liability is capped at $50 for those who notify banks within two business days. Consumers who notify the bank within 60 days have their liability capped at $500. After 60 days, if the consumer doesn't inform the bank, any charges which occur become the consumers' responsibility. If no access device is lost, and fraudulent charges mysteriously appear on a consumer's account, the liability clock begins when the bank notifies its customer of the activity, usually through regular monthly statements.

What consumers should do
The quicker the bank is notified, the better. Reg-E says consumers can notify banks in person, by telephone, or in writing -- the notice is considered given, even if bank employees don't acknowledge receipt of it. A certified letter is probably the best bet; that way you have a copy in case the bank challenges you on the issue of timely notification.

What banks are required to do
Banks must investigate disputed charges within 10 days, and report results to the consumer within three days. Errors must be fixed within one day. If the investigation cannot be completed within 10 days, banks must issue a provisional credit to the consumer for the disputed amount, less $50.

For more information
Click the link below to view the Federal Reserve's page on electronic wire transfers.

© 2006


Author:  ashleycameron [ Wed Aug 20, 2008 5:35 pm ]
Post subject:  Re: Know Your Rights - Electronic Financial Fraud

Very informative and interesting post.
Thanks for sharing...

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