What should you do if you believe your debit or credit card has been compromised? Yes, there are consumer protection regulations that can help. For example, the Electronic Funds Transfer Act (EFTA) and the Consumer Financial Protection Bureau’s (CFPB’s) “Regulation E” limit your liability for losses from unauthorized transactions.
If your debit or credit card number is used to make an unauthorized withdrawal from a checking or savings account, minimize your losses by contacting your bank as soon as possible. Your maximum liability under EFTA is $50 if you notify your bank within two business days after learning of the loss. If you wait longer, you could lose more, according to the law.
If your credit card number is used without your authorization, your liability is normally capped by the Truth in Lending Act (TILA) and the CFPB’s “Regulation Z” at $50 for all unauthorized transactions, and remaining credit card losses are typically absorbed by the card issuer. Some other worthwhile precautions you can take include:
- Do not use ATMs in remote places, especially if the area is not well lit.
- Go elsewhere if you see a sign directing you to only one of multiple ATMs in a location.
- Shield the keypad with your hand when typing your PIN at the ATM or a retailer’s checkout area.
- Regularly check your bank and credit card accounts for unauthorized transactions, even small transactions that you might think might not be worth reporting to your bank.
For more information, click here.
- Ask students to summarize the major provisions of the Electronic Funds Transfer Act (EFTA).
- Why is it important to notify your bank as soon as possible when your account has been compromised?
- Let students debate the issue, “Use cash, why use a debit card?
- What is the Truth and Lending Act and how does it protect you if your debit/credit card is compromised?
- How can you determine if an ATM has a false cover or it has been tampered?
Most financial institutions offer overdraft programs for checking accounts, which for a fee covers a transaction where there is not enough in the account. However, this service can result in several fees before the next deposit is made. For debit cards, an overdraft fee cannot be charged unless you have agreed (“opted in”) to these fees.
To reduce or eliminate overdraft fees, these actions are suggested:
- carefully track your balance; sign up for low-balance alerts
- check your balance when making a debit card purchase; also consider other checks that may not yet cleared
- do not opt-in to an overdraft program for your debit card, or opt-out if you are currently opted in; while your debit/ATM may be declined, you will avoid high fees
- link your checking account to a savings account to cover overdrafts
- contact your financial institution to determine if you are eligible for a line of credit or a linked credit card to cover overdrafts
- compare account fees at other financial institutions
Complaints related to overdraft fees or other financial services may be submitted at http://www.consumerfinance.gov/complaint/ or by calling 855-411-2372.
For additional information on overdraft programs, click here.
- Have students search online or contact the costs associated with overdraft fees at various financial institutions.
- Have students prepare a creative presentation describing actions to take to avoid overdraft fees.
- Describe situations that might result in overdraft fees.
- What are methods to take to avoid overdraft fees?
Counting every penny on your credit and debit card statements can help detect fraud
Most people looking at their bank statements would probably notice if their credit or debit card were used without their approval to purchase a big ticket item, and they would quickly call their bank or card issuer to report the error or fraudulent transaction. But consumers are less likely to be suspicious of very small charges, including those less than a dollar…which is why criminals like to make them.
“These transactions might be signs that someone has learned your account information and is using it to commit a crime,” said Michael Benardo, manager of the (Federal Deposit Insurance Corporation) FDIC’s Cyber Fraud and Financial Crimes Section. “That’s why it’s important to be on the lookout for fraudulent transactions, no matter how small.”
He added, “When thieves fraudulently obtain someone else’s credit or debit card information and create counterfeit card, they might test it out with a small transaction—like buying a pack of gum or a soda—to make sure the counterfeit card works before using it to make a big purchase. If this test goes unnoticed, by the true account holder, thieves will use the card to buy something expensive that they want or that they can easily sell for cash.”
For more information, click here.
- Ask students if they know someone who had his/her credit or debit card compromised. If so, how they detected the illegal charge and how the problem was solved.
- Under what circumstances should you close the compromised account?
- Why is it important to regularly scrutinize your monthly credit and debit card statements?
- What can be consumers do to protect themselves from such frauds? What is the best way to catch this type of fraud?
While beneficiary, collateral, and fair market value are familiar to many, these terms can be especially confusing to those with limited English-language skills. In an attempt to assist various people, the Consumer Financial Protection Bureau has created the Newcomer’s Guides to Managing Money to provide recent immigrants with information about basic money decisions. These guides offer brief suggestions to those who are new to the U.S. banking system. The guides also include guidance for submitting and resolving problems with a financial product or service.
The Newcomer Guides include these topics:
- Ways to receive your money, comparing cash, check, direct deposit, and debit cards.
- Checklist for opening an account, to assist with starting a bank or credit union account.
- Ways to pay your bills, providing guidance on whether to pay by check, debit card, credit card, or online.
- Selecting financial products and services, providing assistance on deciding which financial services are right for various household situations.
Print copies of the guides can be ordered or downloaded. These publications are available to English and Spanish with additional languages to be offered in the future.
For additional information on money guides for newcomers:
- Have students ask people to create a list of financial planning terms that people find confusing.
- Have students suggest methods to have people learn about confusing financial planning terms.
- What financial problems might be encountered by people with limited English-language skills?
- What actions might be taken to assist various groups to better understand banking services and money management activities?
Categories: Bank Fees, Budget, Chapter 2, Chapter 4, Credit Cards, Debit Cards, Debt, Financial Services, Savings
Tags: financial services, payments, wise money management
Millions of consumers use prepaid cards for spending, saving, and managing their money. Card issuers offer diverse products to meet the needs of users and prepaid cards vary immensely across the industry. Such diversity is beneficial to consumers, provided that the overall quality of products is high and that providers continually strive to meet the needs of consumers.
At the same time, it is important at this point in the industry’s development to take stock of the quality of products in the marketplace and to encourage prepaid card issuers to pursue policies that actively improve consumers’ financial lives. Drawing upon the framework of CFSI’s Compass Principles and the definitions of quality articulated in the Compass Guide to Prepaid, this report assesses the level of quality in the current prepaid card marketplace and provides a set of benchmarks against which future progress can be measured.
Eighteen General Purpose Reloadable (GPR) cards are analyzed in this report. These cards collectively represent approximately 90% of the total GPR card marketplace and include the largest players in the industry, as well as a sampling of smaller programs with particularly innovative cards. To develop scores for the industry as a whole, these eighteen cards were assessed against the recommendations outlined in the Compass Guide to Prepaid. Quantitative and qualitative methods of analysis were employed to generate scores that accurately capture the quality of products in the prepaid card marketplace.
For additional information on the Prepaid Card Industry Scorecard, click here:
- Have students research various fees associated with prepaid debit cards.
- Have students create a short video that communicates actions to avoid fees for prepaid debit cards.
- What are the main differences between traditional and prepaid debit cards?
- Explain situations when people might use a prepaid debit card.
- Are there certain age demographics that would use prepaid debit cards more?
Bank customers may now access ATMs without a debit card. Using a smartphone app, both a cash code (an 8-digit number) and the PIN (4 digits) will be required for cash. App customers may authorize another person from phone contacts to obtain money. The recipient will be sent a cash code to allow withdrawal of an approved amount.
Banks also offer a credit card “lock and limit” app to control security and spending. This feature is used to block overseas transactions where the card isn’t present. In addition, a small business app that can accept on-the-spot payments, create estimates and invoices immediately and help to manage cash flow.
For additional information on cardless ATMs go to:
- Have students research various mobile banking technology that might be used in the future.
- Ask students to describe their experiences with various mobile banking apps.
- What are benefits of cardless ATMs for consumers and business?
- Describe potential problems with cardless ATMs.
- What other types of mobile banking apps might be developed in the future?
This article explains why identity thieves want eight different numbers and also provides some helpful tips for avoiding identity theft. The eight numbers include:
1. Phone numbers
2. Specific dates (birth, college attendance, employment, etc.) and Zip Codes
3. PIN Codes
4. Social Security Numbers
5. Bank Account Numbers
6. IP Address
7. Driver’s License and Passport Numbers
8. Health Insurance Account Numbers
For more information go to
You may want to use the information in this blog post and the original article to
- Stress that identity theft is on the rise. According to the article, data breaches are now the third certainty in life and sooner or later, you will become a victim.
- Ask students who have had their identity stolen what steps were necessary to solve the problems associated with identity theft.
1. What have you done to protect the eight numbers that thieves want and need to steal your identity?
2. Today many companies offer services designed to help protect your identity. These companies charge from $100 to $200 a year or more. Would you consider using one of these services?