The Electronic Fund Transfer Act

Continuing my discussion of the importance
of your credit report
, Piggy _bankthe focus of today’s blog is on the
Electronic Fund
Transfer Act
(“EFTA”).  The EFTA was passed in 1978 to
establish consumers’ rights and responsibilities of all
participants in electronic funds transfer activities.  The Act
applies to electronic fund transfers, such as those involving
automatic teller machines (ATMs), point-of-sale debit transactions
and other electronic banking transactions.  It is important to
review your electronic fund transfer (EFT) account statements
regularly as these documents may contain mistakes that reflect
improper transfers and could damage your
credit score

The Act established procedures for resolving mistakes on
electronic fund transfer account statements, including transfers
that you or anyone you have authorized to use your account have not
made; transfers incorrectly identified or showing the wrong amount
or date; computation errors; transfers for which you request an
explanation or documentation, due to a possible error. 
Importantly, however, it provides that when an error is recognized,
your financial institution has obligations to you to investigate,
and where necessary, credit your account to correct the

If you notice an error in an electronic fund transfer relating
to your account there are specific steps you must take to comply
with the Act.  First, under the Act you must write or call the
financial institution immediately and no later than 60 days from
the date of the erroneous statement.  You must provide the
name and account number and an explanation of why you believe there
is an error with the type, dollar amount and date the error was
made.  You may be required to send details of the error in
writing within 10 business days.  In response to your dispute,
the financial institution must investigate the error and provide a
resolution within 45 days.  If it takes more than 10 business
days to complete the investigation (20 days for new accounts) the
financial institution must re-credit the amount in question until
the investigation is complete.  Upon completion of the
investigation the financial institution must correct the error if
it finds one was made and make the re-credit final and if no error
exists, provide a written explanation and notify you of the
deducted re-credit. 

Another important aspect of EFTA is the need for written
authorization to take payments from your account.  Many times,
debt collectors convince (or coerce) consumers to set up regular
automatic payments to be removed from the consumer’s bank account
on a monthly basis.  Whenever a creditor or collector is
taking regular monthly payments out of your account, they must
obtain your authorization in writing.  This is a common
mistake made by collection agencies.

If you feel your rights have been violated under the Electronic
Fund Transfer Act
and would like a free case review, contact SmithMarco P.C.