There are costs assessed for the use of some electronic banking. An ATM transaction fee may be assessed for using an ATM. Fees may be levied by your financial institution as well as by the institution that provides the ATM if you are using an ATM linked to a national network. For example, you might pay your institution $1 to $3 and another $1 to $3 (or more) to the machine provider. Making frequent, small withdrawals can be expensive: a $2 ATM fee is 10 percent of a $20 withdrawal but just 1 percent of a $200 withdrawal. Transaction fees of $1 to $3 also may be assessed whenever you make a purchase via a point-of-sale terminal at a retail store. This is most likely to happen when you use a PIN number. Such a usage is called an “online” transaction and occurs when you hit the “debit” button on the terminal. You can usually avoid the fee if you hit “credit” instead and the transaction becomes an “off-line” transaction. Rather than use your PIN, you sign for the purchase. The transaction is still a debit transaction but is processed in a way that costs less for your bank.
Fees can be assessed for other uses of electronic money management. Some banks charge for online banking services such as bill paying and verification of your account balances. Often these fees for these services are a fixed monthly rate for all usage that may be cheaper than writing checks and mailing payments. These paper-based services are often free
Consumer Protection Regulations
Federal and state regulations have been adopted to provide protections for the use of debit cards and other electronic banking. The Electronic Funds Transfer Act is the governing law, and the Federal Reserve Board’s Regulation E provides specific guidelines on ATM and debit card liability. Cards can be issued only if the card cannot be used until validated and the user is informed of his or her liability for unauthorized use as well as other terms and conditions. When you sign up for electronic banking services, the depository institution must inform you of your rights and responsibilities in a written disclosure statement
Users must be provided with written receipts when using an ATM or POS terminal. These receipts show the amount of the transaction, the date on which it took place, and other pertinent information. General protection of a customer’s account takes the form of a periodic statement sent by the financial institution that shows all electronic transfers to and from the account, fees charged, and opening and closing balances. Smart users of electronic banking services and electronic funds transfers regularly compare the information on this periodic statement with their written receipts.
Fees can be assessed for other uses of electronic money management. Some banks charge for online banking services such as bill paying and verification of your account balances. Often these fees for these services are a fixed monthly rate for all usage that may be cheaper than writing checks and mailing payments. These paper-based services are often free
Consumer Protection Regulations
Federal and state regulations have been adopted to provide protections for the use of debit cards and other electronic banking. The Electronic Funds Transfer Act is the governing law, and the Federal Reserve Board’s Regulation E provides specific guidelines on ATM and debit card liability. Cards can be issued only if the card cannot be used until validated and the user is informed of his or her liability for unauthorized use as well as other terms and conditions. When you sign up for electronic banking services, the depository institution must inform you of your rights and responsibilities in a written disclosure statement
Users must be provided with written receipts when using an ATM or POS terminal. These receipts show the amount of the transaction, the date on which it took place, and other pertinent information. General protection of a customer’s account takes the form of a periodic statement sent by the financial institution that shows all electronic transfers to and from the account, fees charged, and opening and closing balances. Smart users of electronic banking services and electronic funds transfers regularly compare the information on this periodic statement with their written receipts.
Fixing Errors
If you find an error in your periodic statement, notify the issuingorganization in writing as soon as possible. Use the notification procedures found in the disclosure statement accompanying your monthly statement. If the institution needs more than ten business days to investigate and correct a problem, generally it must return the amount in question to your account while it conducts the investigation. If an error did occur, the institution must permanently correct it promptly. If the institution decides that no error occurred, it must explain its decision in writing and let you know that it has deducted any amount temporarily credited during the investigation. In such a case, the institution must honor withdrawals against the credited amount for five days, allowing you time to deposit additional funds. You may ask for copies of the documents on which the institution relied in its investigation and again challenge the outcome if you believe that a mistake was made.
Protections for Lost Cards
Protections for Lost Cards
The sooner you report the loss of an ATM or debit card, the more likely you will be to limit your liability if someone uses the card without your permission. Cardholders are liable for only the first $50 of unauthorized use if they notify the issuing company within two business days after the loss or theft of their card or PIN. Note that fraudulent “online” debit card transactions using a PIN are not afforded this protection. After two days, cardholder liability for unauthorized use rises to $500. Some issuers, including Visa and MasterCard, have voluntarily waived enforcement of this liability. However, you risk unlimited loss for the card’s misuse if, within 60 days after the institution mails your financial statement to you, you do not report an unauthorized transfer or withdrawal. Thus, you could lose all of the money in your account. These regulations apply to debit cards and other cards used to make electronic funds transfers. States may have laws that provide additional protection for consumers in EFT transactions.
Most homeowner’s and renter’s insurance policies already cover your liability for theft of both debit and credit cards. If you are not currently protected, such insurance coverage generally can be added. Many companies sell similar insurance as a separate policy for an annual premium of $30 to $60. In addition, some firms sell a card registration service that will notify all companies with whichyou have debit and credit cards in the event of loss. For $15 to $50 per year, you need make only one telephone call to report all card losses. You can also notify debit and credit card companies yourself at no cost.
Most homeowner’s and renter’s insurance policies already cover your liability for theft of both debit and credit cards. If you are not currently protected, such insurance coverage generally can be added. Many companies sell similar insurance as a separate policy for an annual premium of $30 to $60. In addition, some firms sell a card registration service that will notify all companies with whichyou have debit and credit cards in the event of loss. For $15 to $50 per year, you need make only one telephone call to report all card losses. You can also notify debit and credit card companies yourself at no cost.
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