The laws, regulations, and industry practices that protect consumers who use electronic payment systems: ACH E-checks & prepaid cards

This is the second in a series of three papers that examines the protections available to users of various electronic payment vehicles who fall victim to fraud, discover an error on their statement, or have a dispute with a merchant after making a purchase. Specifically, it examines the federal and state laws that protect consumers in the three situations described above as well as the relevant association, network, and bank policies that may apply. The protection information included in this paper is derived from a wide range of public and non-public sources, including federal and state statutes, issuer-consumer contracts, and interviews with scores of payments industry experts. This second paper focuses on two increasingly popular electronic payment methods: ACH electronic check applications (e-checks) and branded prepaid cards. The first paper in the series examined the two most widely used electronic payment vehicles: credit and debit cards. The third paper will discuss broader industry and policy implications of the authors’ findings.