Consumer Protection -- Electronic Funds Transfer Act

The 1978 Electronic Funds Transfer Act is the governing statute while the Federal Reserve Board's Regulation "E" provides guidelines on electronic funds transfer card liability. The regulations require that:

·         a valid EFT card can be sent only to a consumer who requests it.

·         unsolicited cards can be issued only if the card cannot be used until validated.

·         the financial institution must inform you of your rights and responsibilities under the law in a written Disclosure Statement, including the procedure to correct errors in your periodic statements.

·         the user is entitled to a written receipt when making deposits or withdrawals from an ATM or using a point-of-sale terminal to make a purchase. The receipt must show the amount, date and type of transfer.

·         periodic statements must confirm the amount of all transfers, the dates and types of transfers, type of accounts to or from which funds were transferred, and the address and phone number to be used for inquiries regarding the statement.

Problems and Errors. You have 60 days from the date a problem or error appears on your written terminal receipt or on your periodic statement to notify your financial institution. If you fail to notify the financial institution of the error within 60 days, you may have little recourse. Under federal law, the financial institution has no obligation to conduct an investigation if you have missed the 60-day deadline.

Lost cards. If you report an ATM or EFT card missing before it is used without your permission, the card issuer cannot hold you responsible for any unauthorized withdrawals. If unauthorized use occurs before you report it, the amount you can be held responsible for depends upon how quickly you report the loss.

If you report the loss within two business days after you realize the card is missing but you do report its loss within 60 days after your statement is mailed to you, you could lose a much as $500 because of an unauthorized withdrawal.

If you do not report an unauthorized withdrawal within 60 days after your statement is mailed, you risk losing all the money in your account plus the unused portion of your maximum line of credit established for overdrafts.

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Types of Electronic Currency

Check Cards, the new name for debit cards, can be used instead of cash, personal checks or credit cards. As stated, when you use a check card you transfer funds immediately from your account to the store's account. A growing number of consumers use check cards because they eliminate the hassle and risks of writing checks or carrying large amounts of cash. Important facts you need to know are:

·         You have less bargaining power with a check card than with a credit card. With a credit card you have the right to refuse to pay for the purchase if you are not satisfied. With a debit card you have already paid for the product, so you have less bargaining power with the merchant.

·         A thief with your check card and PIN number can take all the money in your account. The thief can even make point-of-sale purchases without your PIN.

·         Your liability is limited to $50 if you report the checkcard loss within two days, any longer and your liability can go to $500. After 60 days, you can be responsible for the entire amount.

Note: MasterCard and Visa have voluntarily capped the loss liability of checkcard holders at $50. "As welcome as these voluntary protections are, they are too important to be left to the kindness of bank marketing departments," writes Consumer Reports. The consumer advocacy magazine advocates federal law changes to make consumer liability caps mandatory.

·         In an era of increasing bank fees, consumers can expect to pay for the service of using a checkcard.

·         It is the consumer's responsibility to keep checkcard receipts and deduct the dollar amounts of the purchase from your bank balance immediately, in order to avoid overdraft changes.

Smart Cards, sometimes called stored-value cards, have a specific amount of credit embedded electronically in the card. For example, a $100 smart card that you have purchased in advance can be used to cover expenses such as pay phone charges, bridge or expressway tolls, parking fees or Internet purchases. These cards make the transaction fast, easy and convenient.

Smart card technology is in a period of rapid change. Ultimately consumers should be able to customize their smart cards to suit their financial needs with access from their personal computer or cellular phone. Some important consumer issues are:

·         Smart cards are the equivalent of cash so must be guarded.

·         Procedures for recovering the value of a malfunctioning smart card are unclear.

·         The computer chip within the card will contain both financial and personal information. Privacy and security issues could be a problem.

·          

Smart cards may not be covered by the Electronic Funds Transfer Act in case of loss or misuse of the card.

Digital Cash is designed to allow the consumer to pay cash rather than use a credit card to purchase products on the Internet. One type of digital cash allows consumers to transfer money from a financial institution or a credit card into an "electronic purse". The cash is held in a special bank account that is linked to your computer. Another type of digital cash converts money into digital coins that can be placed on your computer's hard drive.

Digital checks allow consumers to use their personal computers to pay recurring bills. Consumers can use computer software provided by a bank, or they can use personal finance software packages such as Quicken or Microsoft Money and subscribe to an electronic bill-paying service.

The technology of paying bills electronically by home computers is advancing rapidly, but relatively few businesses currently can accept payments made directly by computers. Digital checking is expensive. Fees generally run from $5 to $10 a month for 20 transactions. Privacy and security issues are major consumer concerns. Encryption technology may lessen privacy concerns in the future.

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Electronic Banking

Electronic banking, also known as electronic funds transfer (EFT), is simply the use of electronic means to transfer funds directly from one account to another, rather than by check or cash. You can use electronic funds transfer to:

·         have your paycheck deposited directly into your bank or credit union checking account.

·         withdraw money from your checking account from an ATM machine with a personal identification number (PIN), at your convenience, day or night.

·         instruct your bank or credit union to automatically pay certain monthly bills from your account, such as your auto loan or your mortgage payment.

·         have the bank or credit union transfer funds each month from your checking account to your mutual fund account.

·         have your government social security benefits check or your tax refund deposited directly into your checking account.

·         buy groceries, gasoline and other purchases at the point-of-sale, using a check card rather than cash, credit or a personal check.

·         use a smart card with a prepaid amount of money embedded in it for use instead of cash at a pay phone, expressway road toll, or on college campuses at the library's photocopy machine or bookstores.

·         use your computer and personal finance software to coordinate your total personal financial management process, integrating data and activities related to your income, spending, saving, investing, recordkeeping, bill-paying and taxes, along with basic financial analysis and decision making.

Automated Teller Machines (ATMs) also called 24-hour tellers are electronic terminals which give consumers the opportunity to bank at almost any time. To withdraw cash, make deposits or transfer funds between accounts, a consumer needs an ATM card and a personal identification number. Some ATMs charge a usage fee for this service, with a higher fee for consumers who do not have an account at their institution. If a fee is charged, it must be revealed on the terminal screen or on a sign next to the screen.

Direct Deposit and Withdrawal Services allow consumers to authorize specific deposits, such as paychecks or social security checks, to their accounts on a regular basis. It is also possible to authorize the bank, for a fee, to withdraw funds from your account to pay your recurring bills, such as mortgage payment, installment loan payments, insurance premiums and utility bills.

Pay by Phone Systems let consumers phone their financial institutions with instructions to pay certain bills or to transfer funds between accounts.

Point-of-Sale Transfer Terminals allow consumers to pay for retail purchase with a check card, a new name for debit card. This card looks like a credit card but with a significant difference¾ the money for the purchase is transferred immediately from your account to the store's account. You no longer have the benefit of the credit card "float", that is the time between the purchase transaction and when you pay the credit card bill. With immediate transfer of funds at the point-of-sale, it is easy to overdraw your checking account and incur additional charges unless you keep careful watch on spending.

Personal Computer Banking Services offer consumers the convenience of conducting many banking transactions electronically using a personal computer. Consumers can view their account balances, request transfers between accounts and pay bills electronically from home.

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4 Tips For The Successful Businessman

I have a passion for the bald eagle or Haliaeetus Leucocephalus
according to his scientific name. I have this passion as long as
I can remember. But it is not a logical passion. I am Dutch and
a passion for a bird of prey that is common in The Netherlands
would be more obvious. But life is full of inexplicable surprises
and left me with this passion for the bald eagle, the national
symbol of the United States of America. I have seen the
eagles only once in my life in their natural habitat and that
was during a holiday in British Columbia in Canada.

When I read about bald eagles and about the way they live, I
always start thinking about what a businessman can learn from
them in order to become successful and that is what this article
is about.

1. Vision

Bald eagles are birds that can often be found on very high
altitudes. There they soar and with their very sharp eyesight
they have a clear view on the world below them and especially
on the prey they want to catch; fish, that is what they like
most.They can see the milky white spot in the water from a
distance of many miles. In high places they build their nests.
On a rock, on the top of a tree but always on a spot where they
have a good view on the world that surrounds them. And from
their castle they see what is happening around them and that
gives security.

The businessman should also have a clear view on what is
happening in the market. From very far he should recognize his
potential customers and "attack" them at the right moment. At
the same time he should be aware of the dangers that surround
him, anticipate, absorb the environment and be prepared to act
immediately.

2. Knowledge

Bald eagles are confined to their territories. With the seasons
some migrate but you find bald eagles only in a specific habitat
namely forests, mountains and near sea and rivers. You won't
find them in the desert. In their habitat they know what to do,
where they can find prey and which dangers surround them. By
instinct and by learning they have knowledge about the way they
have to conduct their lives and about how they have to behave
in this habitat. They will never go beyond the limitations of this
frame work. If they do, they die.

This holds a lesson for the businessman. He should know
everything about his business and when I say everything, I mean
everything. He should know all about the products he sells from
beginning to end, every detail should be an open book to him.
He can never be surprised with questions on which he has no
answers. He should know about marketing techniques, the
position and plans of competitors etc., etc. And if he doesn't
possess this knowledge by nature, he has to learn it.

3. Enough is enough

When Bald Eagles catch prey, they will catch only one fish at a
time. It is not possible for them to catch more. But they know
precisely how to catch this one fish. Their flying skills, their
strong talons and their eyesight are extremely well developed
and fit for the job. Almost every attempt to catch a prey is
successful.

This phenomenom also holds a wise lesson for the businessman.
He has to restrict himself to a number of products he can handle
and products that matches his skills and abilities. To stay in
the animal world: if you are a cow don't try to jump fences like
a horse. People will only laugh at you. It is better to sell one
product very well than ten without a satisfying result.

4. Courage

Bald eagles mate for life and they are absolutely loyal to each
other. From high altitudes the two birds tumble down in a
dangerous free fall. Mocking the laws of gravity they unite.
Only just above the tree tops they separate and fly wing by wing
to the nest. This spectacular show requires great courage. A
businessman also needs courage to be successful. He has to make
decisions about difficult and uncertain subjects. And he also
needs to know when to stop his free fall. Having courage to make
difficult decisions is not synonymous for being reckless. A
decision that leads to disaster is not a decision, but a wild
guess.

You see....the businessman can learn a great deal from this
majestic bird that embodies not only beauty, strength and
freedom but that possesses also the essential conditions and
abilities to survive.

The beginning businessman as well, who is maybe starting his
business in great uncertainty about the future, can learn from
the bald eagle:

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How to become a successful businessman

So you want to engage in business, but aren't quite sure where to begin. Don't worry; here are some practical ways to begin your journey toward becoming a successful businessman:

Put your plan into writing. You may have so many different business ideas, but until you put them into writing and create a business plan of your chosen idea, chances are those ideas will simply remain theoretical. By creating a business plan you will see clearly for yourself such important details as:

• The Background.
  1. Your company's core mission - what your company will be all about
  2. A description of your products /services

• The Operations.
  1. Your proposed manner of implementation
  2. The systems you will need
  3. Your logistics

• The Financial Plans.
  1. Where the funding will be derived from
  2. Cost - benefit analysis
  3. The projected costs of putting up the business
  4. Your estimates at how much profit you will generate after about 5 months of operation

Remember, your business plan at this point does not have to follow a specific format. You just need to see for yourself what you need to prepare and plan for in order to bring your business to reality, and whether or not it is realistic and workable.

Network and study the workings within the industry. It's a good move to get to know as many players within the same industry as you can. Why? This enables you to gain access on insider information that could make your quest into business smoother than if you had to learn all that information yourself. For example, you could ask fellow entrepreneurs about the hidden costs that starting up the business could entail; the peak months of operation where you could expect the most customers; the trade fairs that occur which you could participate in for advertising purposes. You may experience other benefits such as discounts from suppliers and advertisers, knowledge of better systems for implementing the business processes, and better knowledge of the client base. Remember, knowledge and information can come in abundance just by being in the loop.

Be resourceful. It's important to be resourceful so you could take advantage of available and cost-effective means to effectively boost your business. For example, instead of allotting a huge bulk of your budget to advertising, you could opt to promote your business using low-cost methods such as posting ads in the Internet. Remember, a good businessman is creative in finding better ways the business can operate.

Believe in your company. Start by being passionate about the product or service that your company is offering. For example, if you are very interested in teaching then perhaps you could put up a tutorial center. If you love to bake then consider putting up a bakeshop. The point is you should not put up a business whose products or services you know nothing about.

That being said, you have to sincerely believe that your clients would do good in patronizing your company. Make sure though that you do continuously develop your product, services and systems so it would cater to the needs of your target clients. If you genuinely believe in your company, you will be motivated to promote it, improve it and to let it live a long life.

Be realistic. It's very rare for a company to grow overnight. You can expect losses before enjoying profits. You can even do well to expect periods of loss after some stages of gain. As long as you set realistic expectations and you prepare your business as well as possible for the "worst case" scenario, then you may be one step further in ensuring your business' longevity.

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Business Performance Management Cycle within Manufacturing Model

Fortunately for the novice manager, there is a business performance cycle which can act as a framework. It is the blank canvass on which the manager can imprint the development of the business. It also provides parameters through which one examines the day to day activities of the company.

For the purposes of convenience we will describe the mode that essentially looks at the manufacturing model. This model will vary slightly with those within specific service industries but it gives a good example of the progression of the business performance management project.

It assumes that there are several major activities in the organization which include designing new products, creating models of the potential products, the actual manufacture of those products, and a review of the processes and finally optimizing the benefits of the product line.

At the design stage a concept will be created to resolve a problem. Performance management is there to ensure that that concept adequately meets the needs that have been expressed and is a viable proposition. This process will require quite extension consultation and managers should not be surprised if they have to go back to the drawing board over and over again. Logic suggests that it is better to take time planning than to have an inappropriate product.

The next stage is to translate that concept into a model. Performance management will have a role to play here in terms of ensuring that the prototypes accurately match the agreed conception so that any problems can be resolved at this stage. The model can then be tested against various stringent criteria to ascertain whether it can truly cope with any variables that are expected. Where the prototype is not accurate, the problems with the design will be lost in translation.

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Key Business Metrics-2-

Fred Wilson made a post at http://www.avc.com/a_vc/2010/04/key-business-metrics.html a few days ago about how companies should be tracking and publishing their key business metrics internally that got me thinking at both a conceptual and a "why Easy Insight matters for this" level about that topic. We have our functionality around KPIs (Key Performance Indicators) that enables users to create scorecards of key business metrics, with default sets of KPIs created for the connections you establish--Basecamp, Google Analytics, and so on.

What we haven't really delved into is that set of 4-6 "big metrics" that apply across the entire business...our typical scorecards to this point have been more along the lines of a Marketing scorecard, a Sales scorecard, and so on. Trying to boil things down into 4-6 metrics ended up as an interesting thought exercise for me--in the case of our internal metrics, I came up with this list:

1) # of Unique Visitors to the Application in Time Period
2) # of Distinct Users Active Within the System in Time Period
3) Expectation Adjusted Dollars in the Pipeline
4) Revenue Received in Time Period
5) Todo Items Completed in Time Period

The time period's a bit hazy for me at the moment, probably ranging from 7 days for #2 to 90 days for #4. From there, we can establish the connections to the underlying reports that will help analyze those metrics--identifying conversion rates on visitors from different sources, figuring out what may have helped produce an active user, and so on. I'll be exploring this concept a little more with future blog posts, but wanted to just get anyone else's thoughts at a higher level around those numbers. If you had to define 4-6 metrics for your business, what would they be?

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