Scammers and cybercriminals continuously devise sophisticated methods to drain your bank account. Fortunately, the Electronic Fund Transfer Act (EFTA) provides legal protections. But how robust are these safeguards when you’re targeted?
What EFTA covers and how it safeguards you
EFTA governs unauthorized electronic fund transfers, including debit card transactions, ATM withdrawals, and online payments you didn’t approve. If someone hacks your account, your liability depends on how quickly you report it. If you alert your bank within two business days of discovering the fraud, your loss is limited to $50. Reporting after two days but within 60 days of your statement could raise your responsibility to $500. Miss the 60-day window, and you risk losing the full amount taken.
What your bank must do under the law
Once you report fraud, your bank must investigate, usually within 10 business days. If the investigation takes longer, your bank must provisionally credit your account so you stay afloat while the matter is resolved. These protections apply strictly to consumer accounts and to electronic transfers—not to check or credit card misuse.
When you authorize the transfer—are you covered?
EFTA doesn’t cover funds you willingly send—even if a scammer tricks you. That includes scenarios like phishing, impersonation, or deceptive “help desk” tactics. Although you didn’t realize it, the transaction counts as authorized. As a result, recovering these funds becomes far more difficult.
What can you do to stay protected?
Your most reliable defense is proactive vigilance. You should review your account statements regularly and report any unusual activity immediately. Acting fast triggers the strongest EFTA protections and helps contain potential losses.
EFTA provides you with meaningful protections—but only if you respond swiftly. Your awareness and prompt communication with your bank are essential. Stay vigilant, monitor your accounts, and report suspicious activity as soon as you spot it. These steps can make a significant difference in safeguarding your finances under EFTA.