INTERNET CREDIT

1. YOUR RIGHTS IN CYBERSPACE INTERNET CREDIT

2. PAPER CHECKS REPLACED In the past, commerce primarily consisted of transactions using cash, checks, credit cards, postal money orders, and western union (wired money) In 2003 credit cards, ATM & debit cards surpassed use of paper checks in Internet transactions Electronic Fund Transfer (EFTs)Ease and convenience of transaction Debit cards--consumer enters four-digit (PIN) Personal Identification Number & their account is immediately debited for amount of purchase

3. ELECTRONIC FUNDS TRANSFER ACT (EFTA) 1978 In 1978 congress amended the Consumer Credit Protection Act by passing the ELECTRONIC FUNDS TRANSFER ACT of 1978 (EFTA) Establishes your rights, liabilities, and responsibilities of transactions in the Electronic Fund Transfer (EFTs) system Outlines Individual consumer remedies when loss or theft occurs from your checking or savings account when transacting using EFTs

4. SOME EFTA BANK REQUIREMENTS ATM use-bank must disclose any fees that you must pay to withdraw money If you have no account with bank you must pay $1.50-$2.00 fee Creditors & Employers cannot require EFTs to prepay loans from checking & savings; they need your consent! Lenders may, however, offer cost reduction incentives to persuade borrowers to agree to repay loans by automatic debiting of checking or savings account

5. PAYING BILLS ONLINE PREAUTHORIZED DEDUCTIONS Many of us do this now for ease & convenience-don’t see it-don’t spend it Pay rent, mortgage payments, insurance payments, & utilities online You will not receive a separate receipt for each electronic payment pre-authorized Caution, you need to pay extra attention to bank statement to ensure correct amount has been paid

6. CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERS Loss from ATM, Debit, or PIN numberbut not Credit Card (covered under Truth & Lending Act) we will discuss later… ATM or Debit Card Loss or Fraudulent Transfers Your liability under EFTA for unauthorized use of your ATM or debit card depends on how quickly you report the loss. If you report an ATM or debit card missing before it's used without your permission, EFTA says the card issuer cannot hold you responsible for any unauthorized transfers.

7. CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERS Loss from ATM, Debit, or PIN number, if unauthorized use occurs before you report it, your liability depends on how quickly you report the loss. If you notify bank within twobusiness days after you discoverloss or theft of your ATM or Debit Card or your four-digit (PIN) number your max liability $50.00

8. CONSUMER LIABILITY EFTA UNAUTHORIZED E-TRANSFERS If you discover error & within sixty days after receiving your bank statement you give bank notice-your max liability is $500.00 If you miss the sixty day deadline you could lose all the money in your account plus the unused portion of your line of credit established for overdrafts!

9. WHAT TO DO ? You must carefully review you bank statement for unauthorized transfers You have sixty days from receipt of statement to dispute an electronic charge Bank has ten business days to investigate but can take up to forty days more if bank recredits the money to your account

10. BANK DUTIES ERROR Bank finds error bank must correct it and notify you within one business day Bank finds no error bank must notify you within three business days Bank must provide explanation of their findings and you have right to copy of their findings

11. STOP PAYMENT ON AUTOMATIC DEDUCTIONS Under EFTA you must consent to automatic deductions from your checking and savings account You can stop payment by giving bank three business days or more before schedule transfer—Bank must comply! To permanentlystop future payment you must notify business to make other arrangements for payment

12. DOCUMENT ERROR Federal Trade Commission recommends you notify financial institution by certified letter, return receipt requested (prove bank receipt) Compare your EFT receipts to your periodic bank statements to spot any errors

13. ELECTRONIC CHECKS When you present your paper check, cashier processed your check through an electronic system that records your bank information & amount of check. You sign a receipt, you keep copy, bank transfer your funds automatically to store account-your account deducted immediately Caution! No float. You can’t run to bank & cover short funds Instead, use your credit card or debit card

14. ELECTRONIC CHECKS If you electronic check “bounces” both bank & store will charge you fees-$25.00 x 2 = $50.00 Federal Check 21- Banks can transfer funds immediately using check information images instead of paper Less float time for you to cover checks GOTO: www.ftc.gov/bcp/conline/pubs/credit/echeck.pdf

15. AUTOMATIC-DEBIT SCAMSChecking Account NumberDemand Draft Telemarketer tells you won free prize and needs your “checking account number” In your excitement you give your no. Duh! Scammer puts you number on a “Demand Draft” and withdraws monies from your account Demand Drafts do not require your signature to be cashed-ie aday!

16. INTERNET LOANS Consumers can apply for mortgage loans, home equity loans, personal loans, auto loans Loan Broker E-loan (www.eloan.com) Good website: The Electronic Payments Association (www.nach.org/. FTC Website: ftc.gov/bcp/conline/pubs/credit/atmcard.htm

17. IDENTITY THEFT U.S. fastest growing crime Three types of identity theft: (1) BasicFraud-someone uses your credit or debit card through loss or theft—give to waiter! (2) AccountTakeover-someone posing as you get new credit card or debit card through change of mailing address (3)True IdentityTheft-someone posing as you open one or more accounts in your name

18. BASIC FRAUD CREDIT CARDS LIABILITY UNDER FCBA Basic Fraud-Thief uses you credit card or debit card to make unauthorized purchases Credit cards liability -covered under Truth & Lending Act(TILA) & amended by The Fair Credit Billing Act(FCBA) limits your liability to $50.00 Many card issuers waive the $50.00 liability; it promotes goodwill between firm & card holder Credit Card Loss or Fraudulent Charges: Your maximum liability under FCBA for unauthorized use of your credit card is $50.

19. BASIC FRAUD CREDIT CARDS LIABILITY UNDER FCBA • If you report the loss before your credit cards are used, the FCBA says the card issuer cannot hold you responsible for any unauthorized charges. Also, if your loss involves your credit card number, but not the card itself, you have no liability for unauthorized use. Thief does not possess your card. • If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card.

20. BASIC FRAUDPROTECTION After the loss, review your billing statements carefully. If they show any unauthorized charges, it's best to send a letter to the card issuer describing each questionable charge. Again, tell/write the card issuer the date your card was lost or stolen, or when you first noticed unauthorized charges, and when you first reported the problem to them. Be sure to send the letter to the address provided for under billing errors. Do not send it with a payment or to the address where you make your payments unless you are directed to do so.

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

22. ACCOUNT TAKEOVER Scammer notifies card issuer or bank of change of address Card issuer or bank mails credit cards or bank statement to scammer’s new address Scammer requests new credit or new debit card to new address Your liabilities is limited under TILA & EFTA

23. TRUE IDENTITY THEFTSocial Security No. Scammer opens one or more accounts in your name with your stolen social security number Scammer opens credit card accounts, auto purchases, checking accounts, cell phone accounts, Scammer uses new cards to pay off older accounts—buys time to use new cards

24. TRUE IDENTITY THEFT cont… You start getting calls from collectors on unpaid accounts opened in your name ? You learn about the identity theft when you are turned down for a loan for the bad marks in your credit account Good news: since these thefts were not yours-you are not liable for one penny Bad news: your credit is ruined, but fixable

25. HOW SCAMMERS WORK Waiter holds your card and uses swipe info Waiter returns another card and keeps yours Scammer steals your mail Scammer sends in change of address form and waits for your cards & statements Scammers steal your employee’ records Scammer cracks into your computer and steals data

26. PREVENTING IDENTITY THEFT Do not give out S.S. no. on the phone or online unless you know the person or the institution Flag! You stop receiving your regular bills in the mail- call creditors (change of address scam) Design hard passwords for your bank & credit card accounts Guard your mail; tear up credit card & loan applications you don’t use Get latest antivirus & firewall program for you pc

27. PREVENTING IDENTITY THEFT Avoid automatic log-in & password features. Enter your info-Always! When theft or loss happens-immediately notify card issuer or bank Check your credit report every six months to discover problems You also may want to check your homeowner's insurance policy to see if it covers your liability for card thefts. If not, some insurance companies will allow you to change your policy to include this protection.

28. WHAT TO DO IF YOU ARE VICTIM OF IDENTITY THEFT Place a fraud alert on your credit reports & accounts Notify all creditors, banks-many will ask you to complete an affidavit swearing the accounts are not yours Close any and all accounts that have been compromised by identity thief Notify GPD & file complaint with Federal Trade Commission 1-877-IDTHEFT Get copy of your credit report & review

29. FEDERAL CRIME LAWS ID THEFT 1998 The Identity theft and Assumption Deterrence Act of 1998-felony under federal law 2003 The Fair and Accurate Credit Transactions Act (FACTA)-victims can issue a one-call fraud alert to on of three consumer –reporting agencies 2004 The Identity Theft Penalty EnhancementAct-provides greater penalties

30. ATM & DEBIT CARD Do & Don’ts Don't carry your PIN in your wallet or purse or write it on your ATM or debit card. Never write your PIN on the outside of a deposit slip, an envelope, or other papers that could be easily lost or seen. Carefully check ATM or debit card transactions before you enter the PIN or before you sign the receipt; the funds for this item will be fairly quickly transferred out of your checking or other deposit account.

31. ATM & DEBIT CARD Do & Don’ts • Periodically check your account activity. This is particularly important if you bank online. Compare the current balance and recent withdrawals or transfers to those you've recorded, including your current ATM and debit card withdrawals and purchases and your recent checks. • If you notice transactions you didn't make, or if your balance has dropped suddenly without activity by you, immediately report the problem to your card issuer. Someone may have co-opted your account information to commit fraud.

32. Buying a Registration Service For an annual fee, companies will notify the issuers of your credit card and your ATM or debit card accounts if your card is lost or stolen. This service allows you to make only one phone call to report all card losses rather than calling individual issuers. Most services also will request replacement cards on your behalf.

33. Buying a Registration Service • Purchasing a card registration service may be convenient, but it's not required. The FCBA and the EFTA give you the right to contact your card issuers directly in the event of a loss or suspected unauthorized use. • If you decide to buy a registration service, compare offers. Carefully read the contract to determine the company's obligations and your liability. For example, will the company reimburse you if it fails to notify card issuers promptly once you've called in the loss to the service? If not, you could be liable for unauthorized charges or transfers.