Gilbert: NI

Electronic Fund Transfers Act (EFTA)

CONSUMER TRANSFERS

The EFTA & Regulation E govern any transaction in which a consumer uses e-means to tap her bank account. Definitions: Electronic fund transfera transfer of funds not initiated by paper instruction, through an eterminal/phone/computer that authorizes a financial institution to credit or debit a consumer bk acct. o o Also includes all transactions initiated by a debit card. Its not the same thing as a credit card: use of a cc doesnt effect the cs bk acct, simply results in the accumulation of a debt owed to the issuer of the cc instead. o o CCs are governed by the Truth in Lending Act (TILA) and Regulation Z. Federal law governs both, but favors dc users. PIN number Debit cardaccess device consumer uses to transfer money out of a bk acct.

ATMelectronic terminal that a c inserts a dc to work an EFT from or to a bk acct. Issuance of dcs or Other Access Devices: BKs forbidden to mail out unsolicited credit cards, but are allowed to mail out unsolicited debit cards as long as the card isnt in a validated conditionit can immediately be used to work an EFT; not validated if the c must first take some step (apply for a PIN) before the card can be used.

Preauthorized Transfer C and bk may agree to automatic tRs in/out of the account. o Bk must either tell c each time one is scheduled to occur that it did OR did not occur; or give c a number to call and find out.

C has the right to stop payment by giving the bk notice to do so anytime up to three business days before the scheduled date. o The bk may require oral stop payment orders to be confirmed in writing, and it ceases to be effective 14 days after theyre given unless so confirmed.

P. 190 Error Resolution

Credit Cards TILA amended to include CC statute and became Consumer Credit Protection Act, which is supplemented by Regulation Z. Issuance of the Credit Card: Unlike dcs, ccs may not be issued or distributed without the agreement of the consumer. o A cc sent without her request is not validly issued, and she has no liability for charges made with such a card, Unless she accepts the card by signing it or using it (or authorizing another to use it). Liability for unauthorized use: GIVING IT TO SOMEONE ELSE: if c voluntarily allows someone else to use it, she is liable for all charges made, even if they exceed the amount the user promised to be limited to. o CL agency: giving your card to another confers upon him at least apparent authority to be your agent and bind you. UNAUTHORIZED USE BY NON-AGENT: at the most c is liable for $50, or a lesser amount if she notifies the issuer before the $50 is reached. o Upper limit applies even if she doesnt notify the issuer of the unauthorized use.

Some issuers make her liable for $0 and pass the los back to the merchant who honored the card.

Asserting defenses against the card issuer o If theres something wrong with what she bought using a cc, the issuer may reverse the charge. RegZ allows non-tort claim complaints to issuer if the consumer has FIRST tried to settle the problem with the merchant who honored the card. The amount involved must be more than $50.00, Have occurred in cs home state or within 100 miles of her billing address, but these 2 limits are not mandatory for issuer. Cc issuer then debits the merchants account, leaving it up to him to contact c to resolve it.

Billing Errors o If c receives a bill from cc issuer containing a mistakea charge not incurred/a product not shipped/an unknown transaction, etc [but not a quality problem!] RegZ allows C to complain and require an investigation of the problem. Complaint must be in writing made within 60 days of the sending out of the bill first containing the error. Cc issuer must acknowledge receipt of the complaint within 30 days, and resolve it o Within 2 billing cycles, OR in no event, longer than 90 days. In the interim, cc issuer may NOT report the nonpayment as delinquent to agencies. C can try them both get two bites at the apple; use of one doesnt preclude the other if both are relevant!

Both rights of defense and billing errors are alike and sometimes overlap,

Penalties o o Non-compliant cc issuer faces RegZ damages for: Actual, punitives and atty fees. Under TILA, failure to follow billing error rules leads to a forfeiture of up to $50.00 of the amount of such error, even if it turns out that the c was mistaken and issuer was right all along.

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