Debit cards and electronic payments are convenient ways to pay for purchases or bills, but sometimes there can be errors or even theft. The bank might mistakenly process a charge for the wrong amount. Thieves might use your debit card number to buy a big-ticket item, such as a TV or computer. Fortunately, a federal law called the Electronic Funds Transfer Act (EFTA) protects consumers in these situations.
There are two separate protections under EFTA for debit card holders. The first protection applies when your debit card or its number is used to make a purchase that you did not make. The second protection gives you the right to dispute errors affecting debit card and other electronic transactions.
Note that while you can withhold payment to your credit card lender for poor quality goods or services in many cases, you don’t have a similar right with respect to your debit card. That might be an important consideration if you are making a big ticket purchase (such as furniture or appliances).
See also NCLC’s Consumer Facts “Your Credit Card Rights.”
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