Electronic Banking

                                     Electronic Banking:

                                                For many consumers, electronic banking means 24-hour access to cash through an automated teller machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. But electronic banking now involves many different types of transactions.

                                                Electronic banking, also known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that require, at the most, your
signature or a scan. The federal Electronic Fund Transfer Act (EFT Act) covers some electronic consumer transactions.

          Electronic Fund Transfers: EFT offers several services that consumers may find practical: 

•  To withdraw cash, make deposits, or transfer funds between accounts, you generally insert an ATM card and enter your PIN. Some financial institutions and ATM owners charge a fee, particularly to consumers who don’t have accounts with them or on transactions at remote locations. Generally, ATMs must tell you they charge a fee and its amount on or at the terminal screen before you complete the transaction. Check the rules of your institution and ATMs you use to find out when or whether a fee is charged.
• You also may pre-authorize direct withdrawals so that recurring bills, such as insurance premiums, mortgages, and utility bills, are paid automatically. Be cautious before you pre-authorize direct withdrawals to pay sellers or companies with whom you are unfamiliar; funds from your bank account could be withdrawn fraudulently. 
• Personal Computer Banking lets you handle many banking transactions via your personal computer. For instance, you may use your computer to view your account balance, request transfers between accounts, and pay bills electronically.
• Debit Card Purchase Transactions let you make purchases with a debit card, which also may be your ATM card. This could occur at a store or business, on the Internet or online, or by phone. The process is similar to using a credit card, with some important exceptions. While the process is fast and easy, a debit card purchase transfers money — fairly quickly — from your bank account to the company’s account.  
• Electronic Check Conversion converts a paper check into an electronic payment in a store or when a company receives your check in the mail. In a store, when you give your check to a cashier, the check is run through an electronic system that captures your banking information and the amount of the check. You’re asked to sign a receipt and you get a copy for your records. When your check has been handed back to you, it should be voided or marked by the merchant so that it can’t be used again. 

                                     Be especially careful in Internet and telephone transactions that may involve use of your bank account information, rather than a check. A legitimate merchant that lets you use your bank account information to make a purchase or pay on an account should post information about the process on their website or explain the process over the telephone. The merchant also should ask for your permission to electronically debit your bank account for the item you’re purchasing or paying on. However, because Internet and telephone electronic debits don’t occur face-to-face, you should be cautious with whom you reveal your bank account information. Don’t give this information to sellers with whom you have no prior experience or with whom you have not initiated the call, or to companies that seem reluctant to provide information or discuss the process with you.

                                    Not all electronic fund transfers are covered by the EFT Act. For example, some financial institutions and merchants issue cards with cash value stored electronically on the card itself. Examples include prepaid telephone cards, mass transit passes, and some gift cards. These “stored-value” cards, as well as transactions using them, may not be covered by the EFT Act. This means you may not be covered for the loss or misuse of the card. Ask your financial institution or merchant about any protections offered for these cards.

                                    Disclosures: To understand your legal rights and responsibilities regarding your EFTs, read the documents you receive from the financial institution that issued your “access device.” That is, a card, code or other means of accessing your account to initiate electronic fund transfers. Although the means varies by institution, it often involves a card and/or a PIN. No one should know your PIN except you and select employees of the financial institution. You also should read the documents you receive for your bank account, which may contain more information about EFTs.

            Before you contract for EFT services or make your first electronic transfer, the institution must tell you the following information in a form you can keep.

• A summary of your liability for unauthorized transfers.
• The telephone number and address of the person to be notified if you think an unauthorized transfer has been or may be made, a statement of the institution’s “business days” (which is, generally, the days the institution is open to the public for normal business), and the number of days you have to report suspected unauthorized transfers.
• The type of transfers you can make, fees for transfers, and any limits on the frequency and dollar amount of transfers.
• A summary of your right to receive documentation of transfers, to stop payment on a pre-authorized transfer, and the procedures to follow to stop payment.
• A notice describing the procedures you must follow to report an error on a receipt for an EFT or your periodic statement, to request more information about a transfer listed on your statement, and how long you have to make your report.
• A summary of the institution’s liability to you if it fails to make or stop certain transactions.
• Circumstances under which the institution will disclose information to third parties concerning your account.
• A notice that you may be charged a fee by ATMs where you don’t have an account.

                                    In addition to these disclosures, you will receive two other types of information for most transactions: terminal receipts and periodic statements. Separate rules apply to passbook accounts from which pre-authorized transfers are drawn. The best source of information about those rules is your contract with the financial institution for that account. You’re entitled to a terminal receipt each time you initiate an electronic transfer, whether you use an ATM or make a point-of-sale electronic transfer. The receipt must show the amount and date of the transfer, and its type, such as “from savings to checking.” When you make a point-of-sale transfer, you’ll probably get your terminal receipt from the salesperson.

                                    You won’t get a terminal receipt for regularly occurring electronic payments that you’ve pre-authorized, like insurance premiums, mortgages, or utility bills. Instead, these transfers will appear on your periodic statement. If the pre-authorized payments vary, however, you should receive a notice of the amount that will be debited at least 10 days before the debit takes place.

                                    You’re also entitled to a periodic statement for each statement cycle in which an electronic transfer is made. The statement must show the amount of any transfer, the date it was credited or debited to your account, the type of transfer and type of account(s) to or from which funds were transferred, and the address and telephone number for inquiries. You’re entitled to a quarterly statement whether or not electronic transfers were made.

                                    Keep and compare your EFT receipts with your periodic statements the same way you compare your credit card receipts with your monthly credit card statement. This will help you make the best use of your rights under federal law to dispute errors and avoid liability for unauthorized transfers.