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.