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This article was originally published by the Federal Deposit Insurance Corporation in their October 2018 Issue. For more information visit, www.fdic.gov.
People are making more purchases than ever with credit and debit cards. The more you use your cards, the more likely it is you will experience a credit or debit billing issue, such as an unauthorized purchase, a charge for an incorrect amount, or a returned item not properly credited to your account.
What can you do to protect your money? There are federal laws in place to assist consumers and limit their liability for debit and credit billing issues – Regulation E and the Electronic Funds Transfer Act (EFTA) for debit cards and Regulation Z and the Truth in Lending Act (TILA) for credit cards. (Regulation E and EFTA will provide protections for prepaid accounts effective April 1, 2019.)
Regulation E provides protections for consumers who transfer funds through electronic methods. These methods include point-of-sale (POS) and automated teller machine (ATM) transactions as well as automatic withdrawals from your bank account.
Regulation Z and TILA provide safeguards against inaccurate and unauthorized charges to open-end and revolving credit accounts, including credit cards. According to Regulation Z, you do not pay the disputed amount while the transaction is under investigation by the bank; however, you are required to make payments on any portion of the bill that is not in dispute, including finance charges. Additionally, many credit card issuers have zero-liability policies, meaning that customers typically do not pay for unauthorized transactions, so contact your credit card issuer as soon as you discover any.
Be sure to review your credit card and bank statements regularly to catch billing errors and unauthorized transactions as quickly as possible. It’s also a good idea to review your credit reports regularly for inaccurate information. You are entitled to a free copy of your credit report from each of the three major credit bureaus once every 12 months. To order your free annual reports, go to AnnualCreditReport.com or call toll-free 1-877-322-8228.
Information presented in the HomeStar Resource Center is provided for educational purposes only. HomeStar Bank & Financial Services makes no representations as to the accuracy, completeness, or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. HomeStar recommends you consult a professional for any specific guidance you are seeking.
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