The following federal laws protect you from mistakes on credit card bills and bank account statements. Depending on the situation, consumer protections also may exist in state laws.
The Truth in Lending Act (TILA) sets a $50 maximum loss if your credit card is lost or stolen. You're not responsible for any charges made after you report the credit card lost or stolen.
The Fair Credit Billing Act (FCBA), part of the TILA, protects against inaccurate credit card bills, including a wrong dollar amount or a charge for something you didn't buy. This law also allows you to withhold payments on defective goods or services purchased with a credit card, provided certain conditions are met. In general, the purchase must be for more than $50 from a merchant in your home state or within 100 miles of your home. To dispute a billing error, you must report the problem to the creditor in writing—a phone call isn't sufficient—and your complaint must be received within 60 days after the creditor sent you the statement being questioned.
The Electronic Fund Transfer Act (EFTA) protects you against accounting errors and unauthorized withdrawals via an ATM, debit card, home computer or other electronic transaction:
- If you believe there's an error on your statement, you must contact your financial institution within 60 days after the statement containing the problem was sent. Your institution also must promptly investigate the matter and resolve it generally within 45 days. (In some cases, the bank may take up to 90 days to resolve your problem.)
- If a thief has used your ATM card or debit card, the law limits your losses to $50 if you report an unauthorized withdrawal within two business days of discovering the loss or theft of your debit card. However, you could lose as much as $500 if you wait longer than two days. If you wait more than 60 days after receiving a bank statement that includes an unauthorized transfer, the law doesn't require your bank to reimburse you for any losses due to unauthorized transfers made after the 60-day period. (Note: The banking industry has voluntarily put a $50 liability limit on "off-line" debit card transactions, which do not require a PIN number for extra protection.) In all cases, you're not responsible for money withdrawn after you notify your bank about a lost or stolen card.
