Consumer Protection Law
Protect Your Personal Finances While You Shop Online
Many consumers pay for their internet purchases with credit cards. Those consumers are protected by the Fair Credit Billing Act. Consumers who chose to pay for their transactions with their debit cards or ATM cards are protected by the Electronic Funds Transfer Act.
The Electronic Funds Transfer Act and the Federal Credit Billing Act were enacted in the 1970s and 1980s to protect consumers who use electronic funds or credit cards. While the laws were enacted well before the online shopping boom, they have important implications for purchases made on the internet.
Many people are concerned about having their credit card numbers stolen or misused when they shop online. While a stolen credit card can be a big headache, it is essential to know that the Federal Credit Billing Act includes protection for the online consumer.
If a credit card number is stolen, the credit card holder is not responsible for unauthorized purchases made on that card. However, if the physical card is taken, then the customer might have to pay for the first $50 of unauthorized purchases.
The law also protects the credit card user against billing errors. Remember: You must notify the credit card company as soon as possible if there is a mistake on your bill. Contact your credit card company no later than 60 days after receipt of the first bill containing the error or unauthorized charges.
Consumers who use debit cards have different obligations than those using credit cards. The Electronic Funds Transfer Act provides that a customer must report unauthorized use within 2 days of learning of it. Otherwise, they may be on the hook for unauthorized charges beyond the $50 limit.
If a debit cardholder waits and reports the problem between 2 and 60 days after learning of it, they can be liable for up to $500 in unauthorized purchases. If they wait more than 60 days, they may be on the hook for all unauthorized charges.
There are some ways to minimize your risk while you shop from the comfort of your home or office. As much as you can, ensure you are shopping on secure websites. Carefully review the website's return policies before placing your order. Save a copy of your order form or save the confirmation email for your records.
Every year, millions of Americans shop online without any problems. However, the best way to protect your transactions is to minimize your risk, keep a careful eye on your monthly statement for any errors, and know your rights as an online consumer.