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What Transactions Are Protected by EFTA and Regulation E.

On Behalf of | Mar 10, 2023 | EFTA, Fraudulent Bank Transfers, Identity Theft

The Electronic Funds Transfers Act (EFTA) and its promulgated Regulation E cover a wide range of transactions made by consumers.  The original Act was passed in 1978 due to the anticipated increase in electronic transactions.  As people went more to ATMs than tellers, Congress saw the need to protect consumers.  As technology created more ways to send money, the protection of EFTA and Regulation E has expanded.

EFTA defines an electronic funds transfer as any transfer of funds (other than a transaction originated by check or similar paper instrument) which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape that orders a financial institution to debit or credit an account.  The types of transactions that are covered includes:

Transfers, deposits, or withdrawals made through ATM machines.

Point of sale terminals – i.e. using your debit card at any store.

Automated Clearing House systems.

Telephone payment systems.

Remote banking transactions – such as on-line bill pay.

The few exceptions to the types of transactions that are protected are (1) those performed by check and (2) those performed by a wire transfer under a system similar to the Fed Wire System.  Presenting a piece of paper as payment is simply not an electronic transaction.  And while it is not quite clear what it is about a wire transfer that excludes it from EFTA and Regulation E coverage, consumers still have state law claims to bring against their banks that allow fraudulent transfers.

If you have experienced a loss of your money out of a financial institution due to fraud or error, contact SmithMarco, P.C. for a free case review.