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Welcome to our November 2013 Newsletter!  Please take the time to read the article and contact us should you have any questions or concerns.


Law Offices of Salar Atrizadeh

Online Banking Fraud and Related Regulations

The conveniences of online shopping, electronic banking, and electronic deposits allow consumers and businesses to save time by taking care of their banking through an electronic funds transfer ("EFT"). However, these conveniences have unfortunately led to a vast amount of fraud and unauthorized transfers. Do you deposit personal or business checks using an ATM? Do you frequently conduct online banking or use a credit card for financial transactions? If so, you may be vulnerable to online banking fraud, which can leave you liable for substantial amounts of money. Please contact our law firm in order to speak with an attorney who can explain the applicable laws and regulations.


An EFT includes transfers through an electronic medium, such as a telephone, a computer, and a credit card. Indeed, the magnetic tape on the back of all credit cards prompts financial institutions to make transfers to or from a user's account. Accordingly, any in-person use of a credit card may also constitute an electronic funds transfer. Online banking fraud comes in many forms. Social engineering and malware are the most common forms of online fraud. Social Engineering persuades online users to give up personal information by posing as a trustworthy individual or organization. This can occur through emails and text messages. Malware is malicious software that installs on a computer without the user's consent, records keystrokes, redirects browsers, or displays fake websites to impersonate the user in online banking transactions.


However, consumers can protect themselves from liability and protect their assets by learning about the legal remedies available to them. For example, Regulation E establishes rights, liabilities, and responsibilities for consumers transacting business on consumer accounts. According to Regulation E, consumers may only be liable for up to $50 of an unauthorized electronic funds transfer, unless the consumer fails to timely notify the respective financial institution of a loss or theft. In that case, the liability may increase to $500. Individual banks provide service agreements to consumers in order to explain the terms and conditions of their liabilities. In the event that a consumer reports an unauthorized transfer to a financial institution, Regulation E requires the institution to resolve the claim within a specified deadline.


In addition, there are schemes that trick consumers and business owners into providing their bank or financial account data. By using various methods, scammers obtain unauthorized access to accounts and remove funds or charge credit cards.  In general, these schemes not only include fraud, but also identity theft (i.e., wrongful access and use of another's personal data in a manner that includes fraud or deception for economic gain).


At our law firm, we guide clients in legal matters involving online banking fraud by using extensive knowledge and skills to create innovative solutions. You may contact us at your earliest convenience to setup a free consultation.


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