Direct deposits Debit card transactions Automated teller machine (ATM) transfers Pre-authorized withdrawals from bank accounts Phone-initiated transfers
How Regulation E Works
To truly understand Regulation E, it’s important to get a good grasp on the Electronic Fund Transfer Act. Passed in 1978, the act requires financial institutions to clearly outline the amount they’ll charge consumers for EFTs. Essentially, Regulation E offers the framework to enforce the act. Both the Electronic Fund Transfer Act and Regulation E can help you as a consumer in a number of ways. Both require that financial institutions disclose information such as their phone numbers and addresses so you can report lost or stolen cards. This legislation will protect you from unauthorized transactions and help resolve transaction errors. If someone uses your debit or ATM card before you report it lost or stolen, how quickly you report it to your financial institution will determine your liability. As mentioned, Regulation Z is relevant for credit cards, mortgages, home equity lines of credit, installment loans, and some student loans. While Regulation Z is similar to Regulation E, there are several notable differences between the two. Under Reg E, you have 60 calendar days to report an unauthorized transaction to your financial institution. The time period starts with the date you receive the first statement containing the transaction. In the event that you face a lost or stolen ATM or debit card, inform your financial institution immediately. If you do so within two business days, your liability will be limited to $50. However, if you wait and only report it within 60 days, you may be on the hook for up to $500 in losses. Take the time to familiarize yourself with Regulation E so that you can correct transaction errors properly and protect yourself as a consumer.
