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Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA)
 Jun 08, 2004

The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) offer protection for consumers and guidelines for creditors. This article will define the FCBA and EFTA and provide a guideline of the protections under the FCBA and the EFTA.

With technology, there has come a great increase in convenience. It is easy to make payments over the phone and via the Internet. Additionally, it is very simple to swipe a card at a store and pay for your purchases. But, as one might guess, all of this technology also brings more challenges. It is easier to steal someone else's identity, computers sometimes cause errors, and humans can enter incorrect information into the computer.

When mistakes are made or fraud is perpetrated using electronic means, it can be scary. However, you do not need to be worried about being held accountable for issues that are not your doing. The Fair Credit Billing Act (FCBA) and the Electronic Fund Transfer Act (EFTA) both offer legal guidelines related to these electronic transactions.


While the Fair Credit Billing Act and the Electronic Funds Transfer Act are similar in their nature and protections, they technically cover different situations:

    FCBA: The Fair Credit Billing Act applies only to revolving credit accounts. These are such accounts as credit cards, department store accounts and checking overdraft protection. (It is worth noting that in most cases, overdraft protection is considered a line of credit and charges interest and fees.) If you have an installment credit account, such as a car loan or a student loan, in which you pay a set amount each month, the FCBA does not apply.

    EFTA: The Electronic Fund Transfer Act is designed to protect consumers who engage in transactions at the ATM, use debit cards in person at the store and other banking transactions that are done electronically.

Protections under the FCBA and the EFTA

Both the Fair Credit Billing Act and the Electronic Fund Transfer Act offer similar protections in their respective spheres. Here is what the law offers for guidelines with regard to credit billing and electronic fund transactions:

  • You are not liable for charges made on your card or transfers initiated by those who are not authorized. If you did not make it or authorize it, you are not liable.
  • If information is incorrect, such as a wrong date, you cannot be charged fees or held responsible for the resulting problems.
  • Computation errors cannot be charged to your account, and you cannot be charged fees as a result of computation errors.
  • If payments and charges are not properly recorded by the creditor or bank, you cannot be faulted.
  • If you change your address in writing at least 20 days before the end of the billing cycle, you cannot be held responsible for late payments that occur because the statement was delayed by being sent to the wrong address.

Additionally, it is important to note that you can request copies of documentation. Creditors and others are required to inform you of errors and the steps being taken to fix the problem. If you want documentation, it must be provided to you.

You can learn more about your rights as a consumer under the FCBA and the EFTA by visiting the Federal Trade Commission Web site at

Related Article: Fair Debt Collection Practices Act (FDCPA) >>

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