Banking

Many complex and confusing legal issues come up when dealing with financial institutions. To protect your best interests when dealing with banking issues, you may need to consult an attorney experienced in handling financial agreements or loan disputes.

Correcting Bank Account Errors

An error in your bank statement can be frustrating. To address an error on your account statement, send a quick and detailed notice.

Finding billing errors on a bank statement can be tedious, especially since banks are primarily concerned with security and accuracy. Laws protect consumers from bank account errors, but the benefit of such protections depends on prompt action.

How Are Bank Errors Corrected?

The Electronic Fund Transfer Act establishes protections and procedures for consumers who have experienced mistakes or unauthorized withdrawals from their bank accounts.

To be legally protected, you must follow these procedures if you believe your bank account contains a mistake:

• Describe the error to your financial institution within 60 days of discovering the error.
• Afterward, the financial institution must investigate the error and resolve it within 45 days.
• The bank, however, has to refund the amount in question if it takes more than ten days to resolve the matter. The bank may have 90 days to investigate an error, such as a mistake in opening a new account or an international transaction.
• At the end of its investigation, the financial institution must explain its findings to you, regardless of whether it found an error. If it finds an error, it must correct it immediately.

Limit your financial loss if your ATM or debit card has been stolen or used for identity fraud by:

• Informing your financial institution within two business days. Your loss will be limited to $50 if you do this within two days.
• Even if you failed to notify your financial institution within two business days, you should still notify your financial institution because your loss will be limited to $500. In the event that you do not notify your financial institution within 60 days of receiving the statement containing an illegal withdrawal, your potential loss will not be limited.

Errors in Bank Billing: What Do They Look Like?

Open-end credit is the most common cause of bank billing errors. Open-end credit is consumer credit provided by a bank in which:

• Recurring transactions are reasonably expected by the bank
• An unpaid balance may be subject to occasional fees or interest
• As the outstanding balance is repaid, the amount of available credit increases to its original level

Credit cards or lines of credit are common examples of open-line credit. All customers with open-end credit must receive periodic statements from the banks. Be sure that your periodic statement accurately reflects the activity on your account.

Correcting billing errors depends on how fast you catch them. Charges by unauthorized third parties, missed credits for payments received, debits for services you didn’t receive, and simple calculation errors all lead to billing errors.

How Soon Should I Dispute a Bank Error?

To maximize your chances of resolving your problem, you should notify your bank as soon as possible. If you receive an incorrect statement, you must report it to your bank within 60 days. The 60-day period begins with the statement in which the credit should have appeared if the credit was not posted.

An error notice should be sent to your bank statement’s address. You should include your name, account number, or any other identifying information. The notice should also state that a billing error occurred, the type of error, the date, and the amount. Prepare copies of documents that support your claims, such as receipts or earlier confirmations of payment.

What Are the Bank’s Obligations?

When a bank receives your timely billing error notice, it must notify you in writing within 30 days unless it resolves the billing error during that period. In most cases, the bank must resolve the error within two billing cycles and no later than 90 days after receiving your notice.

If the error involves an unauthorized electronic transfer, the bank must respond quickly.

Electronic transfers can be initiated by ATM, telephone, or online. Electronic transfer errors must be investigated by banks within ten business days of receiving a billing error notice. After discovering the error, the bank must inform the customer within three days and issue a final correction within one day.

What Are My Rights as a Consumer?

As part of the dispute resolution process, the bank must follow certain rules and respect your rights as a consumer. You are free to withhold any portion of the payment related to the disputed amount. If you withhold a portion of the payment related to a disputed amount, the bank cannot:

• Collect the disputed amount
• Make a negative report on your credit history or threaten to do so
• Close, restrict, accelerate, or report delinquent bank accounts

If a bank cannot resolve a dispute regarding an electronic transfer within ten business days, it must provide you with provisional credit for the amount disputed. If your complaint is valid, a bank must correct the error and credit your account with the disputed amount. As a result of the error, the bank must also reimburse you for any overdraft or minimum balance fees you incurred.

If the bank finds no error, it must notify you and explain why it believes the alleged error is incorrect. You have the right to request a copy of the documentary evidence the bank used to make this determination.

Can I Always Access My Funds In a Bank?

If you deposit money into your bank account via a branch, ATM, or electronic deposit, you want to know when the funds can be accessed. To pay your bills, make purchases, and cover expenses, you must withdraw funds from your bank account.

Your money doesn’t always appear in your checking or savings account right away. Banks are allowed to put a hold on deposited funds for a certain period of time under federal regulations. You can’t access those funds until the hold is lifted.

Money can’t be held indefinitely by banks. A bank may hold deposited funds for a certain period of time according to federal laws. Banks can also set their own guidelines for the availability of funds.

The Expedited Funds Availability Act (EFAA) imposes a duty on banks to make funds, which you deposited, available for withdrawal within prescribed timeframes established by federal regulators.

When Does a Bank Have to Make My Deposit Available for Withdrawal?

Usually, if you make your deposit in-person to a bank employee before the bank’s business cut-off time, your recently deposited funds will be available to you no later than the next business day. However, there are exceptions to the next business day rule. Funds may be held longer if:

• Your account was opened in the previous 30 days
• Your deposits are more than $5,000 for a single day
• The bank has to deposit a check that was returned earlier
• There were emergency conditions, such as a natural disaster or communications failure

When Does a Bank Have to Acknowledge My Deposit?

Banks take different amounts of time to recognize your deposit. It is normal for your deposit to be recognized the next business day and not the same day it is made:

• On a non-business day
• At the end of a business day
• After an established cut-off time, such as 2 p.m.

If your deposit is recognized on the next business day, it is possible that the funds will not be available until the next business day. If you deposit at the end of business on Monday, the bank may acknowledge your deposit on Tuesday and release the funds on Wednesday.

Should I Consult a Banking Lawyer?

If you are a party to any of the above disputes or transactions, you should contact a financial lawyer. These specialized professionals can help protect both your money and your rights.

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