NCJ Number
56773
Date Published
1979
Length
83 pages
Annotation
REGULATIONS ISSUED BY THE FEDERAL RESERVE BOARD TO PROTECT CONSUMERS UNDER TWO SECTIONS OF THE ELECTRONIC FUND TRANSFER (EFT) ACT ARE REVIEWED.
Abstract
THE EFT ACT PROTECTS CONSUMERS IN THE USE OF ELECTRONIC FUND TRANSFER SERVICES. THESE SERVICES PERMIT CONSUMERS TO TRANSFER FUNDS WITHOUT THE USE OF CHECKS. AN EFT CARD IS ONE WAY OF EFFECTING SUCH TRANSFERS, AND EFT CARDS CAN BE USED BY CONSUMERS TO WITHDRAW CASH FROM THEIR ACCOUNTS AT AUTOMATED TELLER MACHINES OR TO DEBIT THEIR ACCOUNTS AT THE POINT OF SALE FOR THE PURCHASE OF GOODS OR SERVICES. THE REGULATIONS PERTAIN TO SECTIONS OF THE ACT THAT (1) LIMITS CONSUMER'S LIABILITY FOR UNAUTHORIZED USE OF AN EFT CARD, AND (2) SPECIFY CONDITIONS UNDER WHICH EFT CARDS MAY BE ISSUED. CERTAIN TRANSFERS, INCLUDING AUTOMATIC TRANSFERS FROM SAVINGS ACCOUNTS TO CHECKING ACCOUNTS, ARE EXEMPTED. A FINANCIAL INSTITUTION MAY ISSUE TO A CONSUMER AN EFT CARD THAT IS VALID FOR USE ONLY IN RESPONSE TO AN ORAL OR WRITTEN REQUEST OR AN APPLICATION; AS A RENEWAL OF, OR IN SUBSTITUTION FOR, A CARD THAT HAS ALREADY BEEN USED OR ACCEPTED; AND AS A RENEWAL OF, OR IN SUBSTITUTION FOR, A CARD ISSUED ON AN UNSOLICITED BASIS BEFORE FEBRUARY 8, 1979, PROVIDED CERTAIN DISCLOSURES ARE MADE. AT THE TIME OF ISSUING THE REGULATIONS, THE FEDERAL RESERVE BOARD ALSO ASKED FOR PUBLIC COMMENT, THROUGH APRIL 30, 1979, ON PROPOSALS THAT WOULD REQUIRE CERTAIN DISCLOSURES REGARDING FINANCIAL RESPONSIBILITY FOR THE USE OF LOST OR STOLEN EFT CARDS TO ALL EFT CARDHOLDERS AND THAT WOULD MAKE DISCLOSURES A PRECONDITION OF IMPOSING ANY LIABILITY. REGULATIONS ISSUED BY THE FEDERAL RESERVE BOARD DEALING WITH BANKS AND BANKING, AND SPECIFICALLY WITH EFT SERVICES, AND PROPOSALS ISSUED FOR PUBLIC COMMENT ARE DETAILED.