Online banking from the legal point of view

The use of electronic banking poses many potential concerns with privacy, online theft and identity theft. The use of these processes may hold more convenience; however there may be some losses that will occur as a result of its use.

Electronic banking has been used by many consumers. The use of electronic banking signifies that 24-hour access to cash through an automated teller machine (ATM) or Direct Deposit of paychecks into checking or savings accounts. Electronic banking involves many different types of transactions. Electronic banking has been known as electronic fund transfer (EFT), uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices like cards or codes that allow consumers to authorize or access the account in question. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Many other financial institutions use other forms of debit cards which require a signatur

Are all cards that involve electronic payment systems covered by the EFT Act?

Not all electronic fund transfers are covered by the EFT Act. Some financial institutions and merchants can issue cards with a certain cash value stored electronically on the card itself. These types of cards include prepaid telephone cards, mass transit passes, and some gift cards. These "stored-value" cards, as well as transactions using

them, may not be covered by the EFT Act. The liability for their use means that the consumer may not covered for the loss or misuse of the card. The financial institution or merchant about any protections offered for these cards.


How can consumers become aware of whether or not fraudulent matters are covered by the Electronic Fund Transfer Act?

To understand their legal rights and responsibilities regarding an EFT account, the documents that have been received from the financial institution must be received that state the rights achieved under the “access device.” The access device is the card, code or other means that is involved in the access of the account information to initiate the electronic fund transfers. The means by which this account is initiated is by the a card and potentially by the use of a PIN. This PIN is a unique identifier that involves confidential password information. The financial institution or vendor must ensure that the terms and conditions are understandable to the consumer so that there is no confusion as to the transactions that are involved and the potential remedies that they will have available.