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Afraid to Bank Electronically? Read This
Bank customers who are afraid or confused about banking electronically using a debit card, the Internet, an ATM, telephone or similar device could be missing out on some convenient, time-saving ways to handle their finances. Here's information that can help you overcome your technophobia.
Federal laws and rules may limit your liability for unauthorized transactions and set procedures for correcting errors. The Electronic Fund Transfer Act (EFTA) and the Federal Reserve Board's "Regulation E" offer consumer protections, especially if you report a problem to your financial institution within specified time periods.
Suppose a hacker obtains your debit card number and password and uses that information to transfer funds from your bank account. The EFTA says you will have no liability for an unauthorized transaction if: (1) the situation does not involve the loss of your debit card or password, and (2) you notify your card issuer within 60 days of the date your financial institution mails the statement containing the error.
What if you did lose your debit card or password and a thief makes an unauthorized withdrawal from your account? "It depends on how quickly you notify your financial institution after learning of the lost card or password," said Robert Patrick, an FDIC attorney. "If you notify your financial institution within two business days after learning that the card or password is lost, the EFTA limits your liability to $50 or the amount of any unauthorized transfer, whichever is less." Wait longer, he says, and "your potential liability could go up significantly."
You can protect yourself. Financial institutions spend millions of dollars and follow extensive security programs to make electronic banking transactions go safely and smoothly. But you have a role to play in protecting yourself, too. "Begin a dialogue with your bank about its electronic banking services and its safety features," suggested Michael Jackson, an Associate Director of the FDIC's Division of Supervision and Consumer Protection. "But you need to think about your own safety procedures, too."
As we've cautioned consumers many times, protect your personal information including bank account numbers, passwords and Social Security numbers from scam artists who hide at the other end of the computer screen or phone line. Don't give personal information in response to an unsolicited phone call or e-mail. And before providing credit card or other information on a Web site, confirm that the site is legitimate, not a copycat designed by a crook, by verifying the Web site's address in literature from the company or another reliable source.
Take security measures with your home computer. For example, experts advise installing and periodically updating virus protection and a "firewall" to stop hackers from accessing your home computer. Also keep good records so you can spot and reconcile errors. Review your bank statement as soon as it arrives and promptly report any suspicious or unauthorized transactions. Your quick attention to the problem may help limit your liability and make the puzzle easier to solve.
For more tips about computer security and personal information, visit the Federal Trade Commission's Web site at www.ftc.gov/infosecurity.
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