Federal protection for consumer credit, debit transactions

by Mike Bevel CollectionIndustry.com

Questionable things can happen to consumers who opt in for ?free? services ? either on websites or through direct mailings. Things like unexplained $106 charges on their credit card statement. According to an Associated Press story, consumers who opted in for a free try of some toothpaste found that they were enrolled in some kind of recurring payment program.

For what, though, is left out by the AP story. One assumes that it must be some pretty expensive toothpaste once it?s done being free.

The Federal Deposit Insurance Corp. offers consumers some protection from shady programs like the free(not!) toothpaste scam by making sure that financial institutions are following proper procedures to resolve the consumer’s complaint. In fact, there are more than two dozen consumer protection laws aimed at keeping people safe in financial dealings that range from check writing to credit and debit card payments, setting the interest rates on loans, investing, data privacy and the accuracy of credit reports.

According to Janet Kincaid senior consumer affairs officer with the FDIC, said the issue that draws the most consumer complaints is disputed credit card bills.

The AP story also quotes Andrea Rock, senior editor at Consumer Reports, who said it’s important for consumers to understand that protection against unauthorized charges is better for credit cards than for debit cards. “With credit cards, the liability is limited to $50 or less by law, no matter what,” Rock said. “In fact, most credit card companies have a zero liability policy.” Whereas with debit cards, ?There are reporting requirements that need to be carefully observed.?