Reporting Online Shopping Problems

The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving errors on credit and bank account statements, respectively, including:

• credit charges or electronic fund transfers that you - or anyone you've authorized to use your account - have not made;
• credit charges or electronic fund transfers that are incorrectly identified or show the wrong amount or date;
• computation or similar errors;
• a failure to properly reflect payments or credits, or electronic fund transfers;
• not mailing or delivering credit billing statements to your current address, as long as that address was received by the creditor in writing at least 20 days before the billing period ended; and
• credit charges or electronic fund transfers for which you request an explanation or documentation, because of a possible error.

For credit: The FCBA generally applies to “open end” credit accounts - that is, credit cards and revolving charge accounts, like department store accounts. It does not apply to loans or credit sales that are paid according to a fixed schedule until the entire amount is paid back, like an automobile loan.

Under the FCBA, your liability for lost or stolen credit cards is limited to $50. Notify your card issuer promptly upon discovering the loss. Many companies have toll-free numbers and 24-hour service to deal with such emergencies.

Follow up with a letter. Write to the creditor at the address given for “billing inquiries,”; not the address for sending your payments, and include your name, address, account number and a description of the billing error. Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

And if you send your letter by certified mail, return receipt requested, you'll have proof that the creditor received it. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

The creditor must acknowledge your dispute in writing within 30 days after it is received, unless the problem is resolved within that period. The creditor must conduct an investigation and either correct the mistake or explain why the bill is believed to be correct, within two billing cycles (but not more than 90 days), unless the creditor provides a permanent credit instead.

You may withhold payment of the amount in dispute and any related finance charges and the creditor may not take any action to collect that amount during the dispute.

For debit: The EFTA applies to electronic fund transfers - transactions involving automated teller machines (ATMs), debit cards and other point-of-sale debit transactions, and other electronic banking transactions that can result in the withdrawal of cash from your bank account.

Under the EFTA, if there is a mistake or unauthorized withdrawal from your bank account through the use of a debit card, or other electronic fund transfers, you must notify your financial institution of the problem or error not later than 60 days after the statement containing the problem or error was sent.

Although most financial institutions have a toll-free number to report the problem, you should follow up in writing. For retail purchases, your financial institution has up to 10 business days to investigate after receiving your notice of the error.

The financial institution must tell you the results of its investigation within three business days of completing its investigation. The error must be corrected within one business day after determining the error has occurred.

If the institution needs more time, it may take up to 90 days to complete the investigation - but only if it returns the money in dispute to your account within 10 business days after receiving notice of the error, while it reviews your concerns.

If someone uses your debit card, or makes other electronic fund transfers, without your permission, you can lose from $50 to $500 or more, depending on when you report the loss or theft.

If you report the loss within two business days after you discover the problem, you will not be responsible for more than $50 for unauthorized use. However, if you do not report the loss within two business days after you realize the card is missing, but you do report its loss within 60 days after your statement is mailed to you, you could lose as much as $500 because of an unauthorized withdrawal.

And, if you do not report an unauthorized transfer or withdrawal 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.

Some financial institutions may voluntarily cap your liability at $50 for certain types of transactions, regardless of when you report the loss or theft; because this is voluntary, their policies could change at any time. Ask your financial institution about its liability limits.

For stored-value: The FCBA and the EFTA may not cover stored-value cards or transactions involving them, so you may not be covered for loss or misuse of the card. However, stored-value cards still might be useful for micropayments and other small purchases online because they can be convenient and - in some cases - offer anonymity.

Before you buy a stored-value card or other form of e-money, ask the issuer for written information about the product's features. Find out the card's dollar limit, whether it is reloadable or disposable, if there's an expiration date, and any fees to use, reload or redeem (return it for a refund) the product.

At the same time, ask about your rights and responsibilities. For example, does the issuer offer any protection in the case of a lost, stolen, misused, or malfunctioning card, and who do you call if you have a question or problem with the card?

More Information on Electronic Commerce and Online Payment

Your financial institution, local consumer protection agency and law enforcement agencies like the Federal Trade Commission or your state Attorney General are among the many organizations working to help consumers understand electronic commerce and new online payment options.

Source: Federal Trade Commission