The Electronic Fund Transfer Act (EFTA) of 1979, also known as Regulation E, is a United States federal law that was enacted to protect consumers engaging in electronic fund transfers (EFTs). This law covers various types of transfers including ATM transactions and withdrawals, debit cards, direct deposits, point-of-sale transactions, and online banking platforms.
EFTA protections have greatly influenced how financial institutions manage electronic transactions, improving consumer protections. Simply put, the EFTA requires banks to provide certain information to consumers and defines how consumers can limit liability in the case of unauthorized EFTs.
Let’s examine some specific consumer rights under this act.
Consumer rights
In response to the growth of ATMs and electronic banking, Congress passed the EFTA to provide consumers with a level of confidence similar to what they have had in the traditional checking system. To better understand how EFTA laws safeguard consumer interests, here are some of the rights and protections it provides:
- Consumers have the right to challenge transaction errors and have them corrected within a 45-day period with limited financial penalties.
- Consumer liability for unauthorized transactions is limited, provided they notify their institution within specified time frames. If reported within two business days, the liability limit is $50. If reported within 60 days, the liability can go up to $500.
- Financial institutions must follow certain procedures when investigating and resolving errors. They must also complete their investigations within specified time frames and correct errors promptly.
- Financial institutions and third parties must provide detailed disclosures to consumers about terms and conditions in a downloadable or printable document. This includes information about fees, the process for addressing errors, and the consumer’s rights to receive periodic statements.
- Institutions must provide receipts at the time of a transaction and periodic statements detailing each electronic fund transfer.
- Preauthorized transfers must be in writing and allow consumers to stop payment under certain conditions.
- If a consumer’s debit card or PIN is lost or stolen, their liability is limited for unauthorized transactions.
- ATM transactions must be available 24 hours a day.
The EFTA applies to everyone, including foreign banks with U.S. offices that offer electronic fund transfer services. It covers any U.S.-based account used for these services, regardless of where the transactions actually take place.
Why you should call an attorney today
If a financial institution violates EFTA laws, you may be able to sue for damages in court. This may be when they refuse to credit money back, correct an error, or fail to freeze an account to prevent a transfer on a lost or stolen card. In these cases, you might also be entitled to additional damages, court costs, and attorney fees.
If you find yourself in any of these situations, it’s important to act fast. Remember: EFTA liability limits work in your favor if the violation is reported within two business days, but you may be responsible for all the unauthorized amounts 60 days after the statement is reported.
Have you been the victim of a financial violation and need an EFTA lawyer in California? Brennan Law is the premier consumer protection legal firm in Southern California. With decades of experience and an excellent win record, we will aggressively fight for your rights. Contact us for a free consultation today.