The Electronic Transfer Fund Act: What You Should Know

The Electronic Fund Transfer Act (EFTA), sometimes referred to as Regulation E or Reg E, is a federal law that provides some guardrails for consumers against fraud and account errors.

What Does The EFTA/Reg. E Require?

You look at your account and money’s gone missing. Your direct deposited paycheck is gone the day it landed, there’s a debit card charge you never made or a Zelle transfer you never sent. Cash was withdrawn from an ATM in another state. You may be protected.

Here’s what you need to do and know:

Tell the bank now. If a card, PIN, password, or other access device was lost or stolen, report that within 2 business days after you learn of the loss. Also report any unauthorized transfer within 60 days after the bank sends the statement showing it.
The bank has 10 business days to decide. To take longer, it must first put the disputed money back in your account. One narrow exception may apply if the bank properly asked for written confirmation, and you did not send it.
If the bank denies the claim, ask for the documents it relied on. A denial is not always the end.
Do not wait to seek legal advice. An EFTA lawsuit generally has a 1-year deadline measured from the specific violation. Different violations can happen on different dates.

Is Your Account Covered?

Usually, yes, if the account is mainly for personal, family, or household use. Business accounts are not covered. An account held under a formal trust agreement is generally excluded, but account titles and structures vary. (12 C.F.R. § 1005.2(b))

Many prepaid accounts are covered, including payroll cards and many general-purpose prepaid cards. Government-benefit cards can follow separate rules. (12 C.F.R. §§ 1005.2(b)(3), 1005.15, 1005.18)

Covered

Debit card charges, in a store or online
ATM withdrawals, including ones made with a copied card after a skimmer was used at a gas pump or ATM
Zelle, Venmo, Cash App, and PayPal transfers, when the money comes out of or goes into a covered personal account. Which company is on the hook can depend on how the app and the account are set up. (12 C.F.R. §§ 1005.3(b), 1005.14)
Online banking transfers, bill pay, and mobile app transfers
ACH debits and automatic withdrawals
Direct deposit of a paycheck, Social Security, a pension, or a tax refund
Payroll cards and prepaid debit cards
Money sent to someone in another country if the amount is more than $15. A separate set of rules covers these. They apply even if you do not have an account with the company that sent the money. (12 C.F.R. §§ 1005.30 to 1005.36)
Paper checks

Not Covered

Wire transfers sent through Fedwire, or another system primarily used for transfers between financial institutions or businesses (12 C.F.R. § 1005.3(c)(3))
Business and commercial accounts
Stock and commodity trades (12 C.F.R. § 1005.3(c)(4))
Automatic transfers between your own accounts at the same bank (12 C.F.R. § 1005.3(c)(5))
A one-time transfer you set up in a phone call, unless it is part of a written plan for repeat transfers (12 C.F.R. § 1005.3(c)(6))
Gift cards and store gift certificates. These have their own separate rules about fees and expiration dates. (12 C.F.R. § 1005.20)

What Should You Do If Your Bank Denies Your Claim?

So, you receive a letter from your bank that says it has investigated your matter and found no error. Your money is not coming back. But that letter may not end this matter.

EFTA is the federal statute. Regulation E is the CFPB rule that carries it out. Together they define covered transfers, consumer liability, investigation duties, deadlines, and remedies. Federal law gives financial institutions deadlines and investigation duties. If the institution broke those rules, you may have a claim for your loss and other relief.

The 1-year clock may already be running. Waiting can reduce your options. If money left your account electronically and the institution did not make you whole, obtain legal advice promptly.

How Can 360 Consumer Law Help?

We represent consumers in disputes involving unauthorized electronic transfers, debit-card and ATM fraud, account takeover, identity theft, and failures to follow Regulation E’s error-resolution rules.

We compare what your bank did against what Regulation E required it to do. Then we tell you where you stand, in plain language.

When banks do not follow the law, people have rights. We help them use those rights.