Federal Regulation E (Reg E), which implements the Electronic Fund Transfer Act (EFTA), provides guidelines for, among other things, lost or stolen funds when you use a debit card. Among the rules it establishes:
- To limit your liability to $50, you must report a lost or stolen debit card to your bank within two days of the time you become aware that it's missing.
- If you bring the unauthorized transactions to the bank's notice later than two days but within 60 days of the statement date, your losses will be limited to $500, no matter how much money was stolen.
- If you notify the bank only after the 60-day deadline, you may not get any refund for your losses.
- If you report your card missing before it’s used, the card issuer can’t hold you responsible for any unauthorized transactions.
- If you follow the reporting guidelines, your bank must give you provisional credit for disputed amounts.
A bank must get your permission before it can charge you an overdraft fee for making a purchase or ATM withdrawal with your debit card when you don't have enough money in your account to cover the transaction. If you don't "opt in," any debit card purchases that would cause you to overdraw your account would be declined and you would not be charged a fee.
The bank does not need your "opt-in" to pay your overdraft checks, recurring debits or online bill payments and charge you a fee.
Read the Federal Reserve guide to protecting yourself from overdraft and bounced-check fees.
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