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Electronic Fund Transfer Act (EFTA), Pub. L. No. 95-630 (Title XX of the Financial Institutions Regulatory and Interest Rate Control Act of 1978), 92 Stat. 3728 (Nov. 10, 1978), codified at 15 U.S.C. §1693 et seq.


The EFTA provides consumers with a mechanism for challenging unauthorized transactions and having their accounts recredited in the event of an error. The purpose of the Act is to "provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems." Among other things, the Act limits a consumer's liability for unauthorized electronic fund transfers. If the consumer notifies the financial institution within two business days after learning of the loss or theft of a debit card or other device used to make electronic fund transfers, the consumer’s liability is limited to the lesser of $50 or the amount of the unauthorized transfers that occurred before notice was given to the financial institution.[1]

Additionally, financial institutions are required to provide a consumer with documentation of all electronic fund transfers initiated by the consumer from an electronic terminal. If a financial institution receives, within 60 days after providing such documentation, an oral or written notice from the consumer indicating the consumer’s belief that the documentation provided contains an error, the financial institution must investigate the alleged error, determine whether an error has occurred, and report or mail the results of the investigation and determination to the consumer within 10 business days.[2] The notice from the consumer to the financial institution must identify the name and account number of the consumer; indicate the consumer's belief that the documentation contains an error and the amount of the error; and set forth the reasons for the consumer’s belief that an error has occurred.[3]

In the event that the financial institution determines that an error has occurred, the financial institution must correct the error within one day of the determination in accordance with the provisions relating to the consumer’s liability for unauthorized charges.[4] The financial institution may provisionally recredit the consumer’s account for the amount alleged to be in error pending the conclusion of its investigation and its determination of whether an error has occurred, if it is unable to complete the investigation within 10 business days.[5]

The Act limits a consumer's liability for fraudulent debit card transactions to no more than $50 (or, if the consumer fails to notify his bank "within two business days after the consumer learns of the loss or theft," no more than $500).[6]

The Federal Trade Commission enforces the Act and its implementing Regulation E with regard to most non-bank entities.[7]


  1. 15 U.S.C. §1693g(a), 12 C.F.R. §205.6(b)(1).
  2. 15 U.S.C. §1693f(a), 12 C.F.R. §205.11(b), (c).
  3. Id.
  4. 15 U.S.C. §1693f(b).
  5. Id. §1693f(c), 12 C.F.R. §205.11(c).
  6. 15 U.S.C. §1693g(a).
  7. See 15 U.S.C. §1693o(c).


See also[]