INTERNET CREDITINTERNET CREDIT

YOUR RIGHTS IN CYBERSPACEYOUR RIGHTS IN CYBERSPACE

PAPER CHECKS REPLACEDPAPER CHECKS REPLACED In the past, commerce primarily consisted of In the past, commerce primarily consisted of

transactions using cash, checks, credit cards, transactions using cash, checks, credit cards, postal money orders, and western union (wired postal money orders, and western union (wired money)money)

In 2003 credit cards, ATM & debit cards In 2003 credit cards, ATM & debit cards surpassedsurpassed use of paper checks in Internet use of paper checks in Internet transactionstransactions

EElectronic lectronic FFund und TTransfer (EFTs)ransfer (EFTs) Ease Ease and and convenienceconvenience of transaction of transaction

Debit cards-Debit cards--consumer enters four-digit (PIN) -consumer enters four-digit (PIN) PPersonal ersonal IIdentification dentification NNumber & their account is umber & their account is immediately debited for amount of purchaseimmediately debited for amount of purchase

EELECTRONIC LECTRONIC FFUNDS UNDS TTRANSFER RANSFER AACT (EFTA) 1978CT (EFTA) 1978

In 1978 congress amended the In 1978 congress amended the Consumer Credit Consumer Credit Protection ActProtection Act by passing the by passing the EELECTRONIC LECTRONIC FFUNDS UNDS TTRANSFER RANSFER AACT of 1978 (EFTA)CT of 1978 (EFTA)

Establishes your rights, liabilities, and Establishes your rights, liabilities, and responsibilities of transactions in the responsibilities of transactions in the EElectronic lectronic FFund und TTransfer (EFTs)ransfer (EFTs) system system

Outlines Individual consumer Outlines Individual consumer remediesremedies when when loss or theftloss or theft occurs from your occurs from your checking or checking or savingssavings account when transacting using account when transacting using EFTsEFTs

SOME EFTA BANK SOME EFTA BANK REQUIREMENTSREQUIREMENTS

ATM use-bank must ATM use-bank must disclosedisclose any fees that you any fees that you must pay to withdraw moneymust pay to withdraw money

If you have If you have no accountno account with bank you must pay with bank you must pay $1.50-$2.00 fee$1.50-$2.00 fee

Creditors & EmployersCreditors & Employers cannot require EFTs to cannot require EFTs to prepay loans from checking & savings; prepay loans from checking & savings; they they need your consent!need your consent!

LendersLenders may, however, offer cost reduction may, however, offer cost reduction incentives to persuade borrowers to agree to incentives to persuade borrowers to agree to repay loans by automatic debiting of checking or repay loans by automatic debiting of checking or savings accountsavings account

PAYING BILLS ONLINE PAYING BILLS ONLINE PREAUTHORIZED DEDUCTIONSPREAUTHORIZED DEDUCTIONS

Many of us do this now for ease & Many of us do this now for ease & convenience-convenience-don’t see it-don’t spend itdon’t see it-don’t spend it

Pay rent, mortgage payments, insurance Pay rent, mortgage payments, insurance payments, & utilities payments, & utilities onlineonline

You You will notwill not receive a separate receipt for receive a separate receipt for each electronic payment pre-authorizedeach electronic payment pre-authorized

CautionCaution,, you need to pay you need to pay extra attentionextra attention to bank statement to ensure correct to bank statement to ensure correct amount has been paidamount has been paid

CONSUMER LIABILITY EFTA CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERSUNAUTHORIZED E-TRANSFERS

Loss from Loss from ATM, Debit, or PIN numberATM, Debit, or PIN number but not but not Credit CardCredit Card (covered under Truth & Lending (covered under Truth & Lending Act) we will discuss later…Act) we will discuss later…

ATM or Debit Card Loss or Fraudulent Transfers ATM or Debit Card Loss or Fraudulent Transfers Your liability under EFTA for unauthorized use of Your liability under EFTA for unauthorized use of your ATM or debit card depends on your ATM or debit card depends on how how quicklyquickly you report the loss. you report the loss.

If you report an ATM or debit card missing If you report an ATM or debit card missing before it's usedbefore it's used without your permission, EFTA without your permission, EFTA says the card issuer says the card issuer cannotcannot hold you hold you responsible for responsible for any unauthorized transfers. any unauthorized transfers.

CONSUMER LIABILITY EFTA CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERSUNAUTHORIZED E-TRANSFERS

Loss from Loss from ATM, DebitATM, Debit, , or PIN numberor PIN number, if , if unauthorized use occurs unauthorized use occurs before you before you report itreport it,, your liability depends on your liability depends on how how quicklyquickly you report the loss. you report the loss.

If you notify bank within If you notify bank within twotwo businessbusiness daysdays after after you discoveryou discover loss or theft of loss or theft of your ATM or Debit Card or your four-digit your ATM or Debit Card or your four-digit (PIN) number (PIN) number your max liability $50.00your max liability $50.00

CONSUMER LIABILITY EFTA CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERSUNAUTHORIZED E-TRANSFERS

If If you discover erroryou discover error & & within sixty dayswithin sixty days after receiving your bank statement you after receiving your bank statement you give bank notice-your max liability is give bank notice-your max liability is $500.00$500.00

If you If you miss miss the the sixty daysixty day deadline you deadline you could lose could lose all the moneyall the money in your account in your account plusplus the unused portion of your line of the unused portion of your line of credit established for overdrafts!credit established for overdrafts!

WHAT TO DO ?WHAT TO DO ?

You must carefully You must carefully reviewreview you bank you bank statement for unauthorized transfersstatement for unauthorized transfers

You have You have sixty dayssixty days from from receipt receipt of of statement to dispute an electronic chargestatement to dispute an electronic charge

Bank has Bank has ten business daysten business days to to investigate but can take up to investigate but can take up to forty days forty days moremore if bank recredits the money to your if bank recredits the money to your accountaccount

BANK DUTIES ERRORBANK DUTIES ERROR

Bank Bank finds errorfinds error bank must correct it and bank must correct it and notify you within notify you within oneone business day business day

Bank finds Bank finds no error bankno error bank must notify you must notify you within within three three business daysbusiness days

Bank must provide explanation of their Bank must provide explanation of their findings and you have findings and you have rightright to copy of to copy of their findingstheir findings

STOP PAYMENT ON AUTOMATIC STOP PAYMENT ON AUTOMATIC DEDUCTIONSDEDUCTIONS

Under EFTA you must Under EFTA you must consentconsent to to automatic deductions from your checking automatic deductions from your checking and savings accountand savings account

You can You can stop paymentstop payment by giving bank by giving bank three business daysthree business days or more before or more before schedule transfer—Bank must comply!schedule transfer—Bank must comply!

To To permanentlypermanently stop future payment you stop future payment you must notify business to make other must notify business to make other arrangements for paymentarrangements for payment

DOCUMENT ERRORDOCUMENT ERROR

Federal Trade Commission recommends Federal Trade Commission recommends you notify financial institution by you notify financial institution by certified certified letterletter, return receipt requested (prove bank , return receipt requested (prove bank receipt)receipt)

Compare your EFT receipts to your Compare your EFT receipts to your periodic bank statements to spot any periodic bank statements to spot any errorserrors

ELECTRONIC CHECKSELECTRONIC CHECKS

When you present your paper check, cashier When you present your paper check, cashier processed your check through an electronic processed your check through an electronic system that records your bank information & system that records your bank information & amount of check. amount of check.

You sign a receipt, you keep copy, bank transfer You sign a receipt, you keep copy, bank transfer your funds your funds automatically automatically to store account-your to store account-your account deducted account deducted immediatelyimmediately

Caution! Caution! No floatNo float. You can’t run to bank & cover . You can’t run to bank & cover short fundsshort funds

Instead, use your credit card or debit cardInstead, use your credit card or debit card

ELECTRONIC CHECKSELECTRONIC CHECKS

If you electronic check “bounces” both bank & If you electronic check “bounces” both bank & store will charge you fees-$25.00 x 2 = $50.00store will charge you fees-$25.00 x 2 = $50.00

Federal Check 21- Banks can transfer funds Federal Check 21- Banks can transfer funds immediately using check information images immediately using check information images instead of paperinstead of paper

Less float time for you to cover checks Less float time for you to cover checks GOTO: GOTO:

www.ftc.gov/bcp/conline/pubs/credit/echeck.pdfwww.ftc.gov/bcp/conline/pubs/credit/echeck.pdf

AUTOMATIC-DEBIT SCAMSAUTOMATIC-DEBIT SCAMS CChecking Account Numberhecking Account Number

Demand DraftDemand Draft

Telemarketer tells you won free prize and needs Telemarketer tells you won free prize and needs your your “checking account number”“checking account number”

In your excitement you give your no. Duh!In your excitement you give your no. Duh! Scammer puts you number on a Scammer puts you number on a “Demand “Demand

Draft”Draft” and withdraws monies from your account and withdraws monies from your account Demand Drafts Demand Drafts do not require your signaturedo not require your signature

to be cashed-ie aday!to be cashed-ie aday!

INTERNET LOANSINTERNET LOANS

Consumers can apply for mortgage loans, Consumers can apply for mortgage loans, home equity loans, personal loans, auto home equity loans, personal loans, auto loansloans

Loan Broker E-loan (Loan Broker E-loan (www.eloan.comwww.eloan.com)) Good website: The Electronic Payments Good website: The Electronic Payments

Association (Association (www.nach.org/www.nach.org/.. FTC Website: FTC Website:

ftc.gov/bcp/conline/pubs/credit/atmcard.htftc.gov/bcp/conline/pubs/credit/atmcard.htmm

IDENTITY THEFTIDENTITY THEFT

U.S. fastest growing crimeU.S. fastest growing crime Three typesThree types of identity theft: of identity theft: (1) Basic(1) Basic FraudFraud-someone uses your credit or -someone uses your credit or

debit card through loss or theft—give to waiter!debit card through loss or theft—give to waiter! (2) Account(2) Account TakeoverTakeover-someone posing as you -someone posing as you

get new credit card or debit card through change get new credit card or debit card through change of mailing addressof mailing address

(3)True Identity(3)True Identity TheftTheft-someone posing as you -someone posing as you open one or more accounts in your nameopen one or more accounts in your name

BASIC FRAUDBASIC FRAUD CREDIT CARDS CREDIT CARDS LIABILITY UNDER FCBALIABILITY UNDER FCBA

Basic Fraud-Basic Fraud-Thief uses you credit card or debit Thief uses you credit card or debit card to make unauthorized purchasescard to make unauthorized purchases

Credit cardsCredit cards liability -covered under liability -covered under Truth & Truth & Lending ActLending Act (TILA) & amended by The Fair (TILA) & amended by The Fair Credit Billing ActCredit Billing Act (FCBA)(FCBA) limits your liability to limits your liability to $50.00$50.00

Many card issuers Many card issuers waivewaive the $50.00 liability; it the $50.00 liability; it promotes goodwill between firm & card holderpromotes goodwill between firm & card holder

Credit Card Loss or Fraudulent Charges: Your Credit Card Loss or Fraudulent Charges: Your maximum liability under FCBA for unauthorized maximum liability under FCBA for unauthorized use of your credit card is $50. use of your credit card is $50.

BASIC FRAUDBASIC FRAUD CREDIT CARDS CREDIT CARDS LIABILITY UNDER FCBALIABILITY UNDER FCBA

If you report the loss If you report the loss before your credit before your credit cards are usedcards are used, the FCBA says the card , the FCBA says the card issuer issuer cannotcannot hold you responsible for any hold you responsible for any unauthorized charges. Also, if your loss unauthorized charges. Also, if your loss involves your involves your credit card number, but not credit card number, but not the card itselfthe card itself, you have , you have no no liability for liability for unauthorized use. Thief does not possess unauthorized use. Thief does not possess your card.your card.

If a thief uses your cards If a thief uses your cards before before you report you report them missing, the them missing, the most you will owemost you will owe for for unauthorized charges is $50 per card. unauthorized charges is $50 per card.

BASIC FRAUDBASIC FRAUD PROTECTIONPROTECTION

After the loss, After the loss, review review your billing statements carefully. If your billing statements carefully. If they show any unauthorized charges, it's best to send a they show any unauthorized charges, it's best to send a letter to the card issuer describing each questionable letter to the card issuer describing each questionable charge. charge.

Again, tell/write the card issuer the date your card was Again, tell/write the card issuer the date your card was lost or stolen, or when you first noticed unauthorized lost or stolen, or when you first noticed unauthorized charges, and when you first reported the problem to charges, and when you first reported the problem to them. them.

Be sure to send the letter to the address provided for Be sure to send the letter to the address provided for under under billing errorsbilling errors. .

Do not sendDo not send it with a payment or to the address it with a payment or to the address where where you make your paymentsyou make your payments unless you are directed to do unless you are directed to do so. so.

BASIC FRAUDBASIC FRAUD PROTECTIONPROTECTION

The best protections against card fraud The best protections against card fraud is to know where your cards are at all is to know where your cards are at all times and to keep them secure. For times and to keep them secure. For protection of ATM and debit cards that protection of ATM and debit cards that involve a Personal Identification involve a Personal Identification Number (PIN), keep your PIN a secret. Number (PIN), keep your PIN a secret. Don't Don't use your address, birthdate, use your address, birthdate, phone or Social Security number as the phone or Social Security number as the PIN and do memorize the number.PIN and do memorize the number.

ACCOUNT TAKEOVERACCOUNT TAKEOVER

Scammer notifies card issuer or bank of Scammer notifies card issuer or bank of change of addresschange of address

Card issuer or bank mails credit cards or Card issuer or bank mails credit cards or bank statement to scammer’s bank statement to scammer’s new new addressaddress

Scammer requests Scammer requests newnew credit or credit or new new debit card to debit card to new addressnew address

Your liabilities is limited under TILA & Your liabilities is limited under TILA & EFTAEFTA

TRUE IDENTITY THEFTTRUE IDENTITY THEFTSocial Security No.Social Security No.

Scammer opens one or more accounts in Scammer opens one or more accounts in your name with your stolen your name with your stolen social security social security numbernumber

Scammer opens credit card accounts, Scammer opens credit card accounts, auto purchases, checking accounts, cell auto purchases, checking accounts, cell phone accounts,phone accounts,

Scammer uses Scammer uses new cardsnew cards to pay off to pay off older older accountsaccounts—buys time to use new cards—buys time to use new cards

TRUE IDENTITY THEFT cont…TRUE IDENTITY THEFT cont…

You start getting calls from collectors on You start getting calls from collectors on unpaid accountsunpaid accounts opened in your name ? opened in your name ?

You learn about the identity theft when you You learn about the identity theft when you are are turned downturned down for a loan for the for a loan for the bad bad marksmarks in your credit account in your credit account

Good news: since these thefts were not Good news: since these thefts were not yours-you are not liable for yours-you are not liable for one pennyone penny

Bad news: your credit is Bad news: your credit is ruinedruined, but fixable, but fixable

HOW SCAMMERS WORKHOW SCAMMERS WORK

Waiter holds your card and uses Waiter holds your card and uses swipe infoswipe info Waiter returns Waiter returns another cardanother card and keeps yours and keeps yours Scammer steals your Scammer steals your mailmail Scammer sends in Scammer sends in change of addresschange of address form and form and

waits for your cards & statementswaits for your cards & statements Scammers steal your Scammers steal your employee’employee’ records records Scammer Scammer crackscracks into your computer and into your computer and steals steals

data data

PREVENTING IDENTITY THEFTPREVENTING IDENTITY THEFT

Do not give out S.S. no. on the phone or online Do not give out S.S. no. on the phone or online unless you know the person or the institution unless you know the person or the institution

Flag! You stop receiving your regular bills in the Flag! You stop receiving your regular bills in the mail- call creditors (change of address scam)mail- call creditors (change of address scam)

Design hard passwords for your bank & credit Design hard passwords for your bank & credit card accountscard accounts

Guard your mail; tear up credit card & loan Guard your mail; tear up credit card & loan applications you don’t useapplications you don’t use

Get latest antivirus & firewall program for you pcGet latest antivirus & firewall program for you pc

PREVENTING IDENTITY THEFTPREVENTING IDENTITY THEFT

Avoid automatic log-in & password features. Enter your Avoid automatic log-in & password features. Enter your info-Always!info-Always!

When theft or loss happens-immediately notify card When theft or loss happens-immediately notify card issuer or bank issuer or bank

Check your credit report every six months to discover Check your credit report every six months to discover problemsproblems

You also may want to check your You also may want to check your homeowner's homeowner's insurance policyinsurance policy to see if it covers your liability for card to see if it covers your liability for card thefts. If not, some insurance companies will allow you to thefts. If not, some insurance companies will allow you to change your policy to include this protection.change your policy to include this protection.

WHAT TO DO IF YOU ARE WHAT TO DO IF YOU ARE VICTIM OF IDENTITY THEFTVICTIM OF IDENTITY THEFT

Place a Place a fraud alertfraud alert on your credit reports & on your credit reports & accountsaccounts

Notify all creditors, banks-many will ask you to Notify all creditors, banks-many will ask you to complete an complete an affidavitaffidavit swearing the accounts are swearing the accounts are not yoursnot yours

CloseClose any and all accounts that have been any and all accounts that have been compromised by identity thiefcompromised by identity thief

Notify GPD & file complaint with Federal Trade Notify GPD & file complaint with Federal Trade Commission 1-877-IDTHEFTCommission 1-877-IDTHEFT

Get copy of your credit report & reviewGet copy of your credit report & review

FEDERAL CRIME LAWS ID FEDERAL CRIME LAWS ID THEFTTHEFT

1998 The Identity theft and Assumption 1998 The Identity theft and Assumption Deterrence Act of 1998-Deterrence Act of 1998-felony under federal felony under federal law law

2003 The Fair and Accurate Credit 2003 The Fair and Accurate Credit Transactions Act (FACTA)-Transactions Act (FACTA)-victims can issue a victims can issue a one-call one-call fraud alertfraud alert to on of three consumer – to on of three consumer –reporting agencies reporting agencies

2004 The Identity Theft Penalty Enhancement2004 The Identity Theft Penalty Enhancement ActAct-provides greater penalties-provides greater penalties

ATM & DEBIT CARD Do & Don’tsATM & DEBIT CARD Do & Don’ts

Don't carry your PIN in your wallet or Don't carry your PIN in your wallet or purse or write it on your ATM or debit card. purse or write it on your ATM or debit card.

Never write your PIN on the outside of a Never write your PIN on the outside of a deposit slip, an envelope, or other papers deposit slip, an envelope, or other papers that could be easily lost or seen. that could be easily lost or seen.

Carefully check ATM or debit card Carefully check ATM or debit card transactions before you enter the PIN or transactions before you enter the PIN or before you sign the receipt; the funds for before you sign the receipt; the funds for this item will be fairly quickly transferred this item will be fairly quickly transferred out of your checking or other deposit out of your checking or other deposit account. account.

ATM & DEBIT CARD Do & Don’tsATM & DEBIT CARD Do & Don’ts

Periodically check your account activity. This is Periodically check your account activity. This is particularly important if you particularly important if you bank onlinebank online. . Compare the current balance and recent Compare the current balance and recent withdrawals or transfers to those you've withdrawals or transfers to those you've recorded, including your current ATM and debit recorded, including your current ATM and debit card withdrawals and purchases and your recent card withdrawals and purchases and your recent checks. checks.

If you notice transactions you didn't make, or if If you notice transactions you didn't make, or if your balance has dropped suddenly without your balance has dropped suddenly without activity by you, immediately report the problem activity by you, immediately report the problem to your card issuer. Someone may have co-to your card issuer. Someone may have co-opted your account information to commit fraud. opted your account information to commit fraud.

Buying a Registration ServiceBuying a Registration Service

For an annual fee, companies will notify For an annual fee, companies will notify the issuers of your credit card and your the issuers of your credit card and your ATM or debit card accounts if your card is ATM or debit card accounts if your card is lost or stolen. lost or stolen.

This service allows you to make only This service allows you to make only one one phone call to report all card lossesphone call to report all card losses rather than calling individual issuers. Most rather than calling individual issuers. Most services also will request replacement services also will request replacement cards on your behalf.cards on your behalf.

Buying a Registration ServiceBuying a Registration Service

Purchasing a card registration service may be Purchasing a card registration service may be convenient, but it's not required. The FCBA and the convenient, but it's not required. The FCBA and the EFTA give you the right to contact your card issuers EFTA give you the right to contact your card issuers directly in the event of a loss or suspected unauthorized directly in the event of a loss or suspected unauthorized use.use.

If you decide to buy a registration service, compare If you decide to buy a registration service, compare offers. Carefully read the contract to determine the offers. Carefully read the contract to determine the company's obligations and your liability. For example, company's obligations and your liability. For example, will the company reimburse you if it fails to notify card will the company reimburse you if it fails to notify card issuers promptly once you've called in the loss to the issuers promptly once you've called in the loss to the service? If not, you could be liable for unauthorized service? If not, you could be liable for unauthorized charges or transfers.charges or transfers.