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
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
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
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
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