contains specific information that authorizes a bank to withdraw a certain
amount of money from a person’s account and pay that amount to another person.
Electronic funds transfer systems allow for payment between parties to occur
Sample Electronic Funds
Transfer (EFT) Systems
Automated Teller Machines (ATMs). Consumers can get cash, make deposits, pay
bills, or transfer funds from one account to another electronically
with the use of a debit card and a PIN
Point-of-Sale (POS) Transactions. Some debit or check
cards can be used when shopping. To pay for a purchase, the consumer
presents a debit card instead of cash. Money is taken out of the consumer’s
account and put into the merchant’s account electronically.
Preauthorized Transfers. This is a method of automatically withdrawing funds
from a consumer's account when the
consumer authorizes the bank or a third party to do so. For example,
consumers can authorize financial institutions to
automatically withdraw payments for
insurance, mortgage, utility, or other bills.
Telephone Transfers. Consumers can transfer funds from one account to
another— from savings to checking, for example—or can order payment of specific
bills by phone.
Electronic Funds Transfer Act (EFTA) covers various unauthorized electronic
transfers processed through a person's checking account. Use of a stolen debit
card by a thief is an example of an unauthorized
How Do I Correct
Unauthorized Electronic Transfers?
The way to
report errors is somewhat different with unauthorized banking transactions than
it is with credit cards. But as with credit cards, banks
must investigate and promptly correct any unauthorized transactions that you
report. If you believe there has been an unauthorized transaction relating to
your bank account:
or call your bank immediately but no later than 60
days from the date of the first statement that contains the error was mailed to
you. Give your name, account number,
dollar amount and date in question. Explain why you believe there
is an error. If you call, you may be asked to send this information in writing
within 10 days. Click here for a
sample bank account dispute letter.
bank must promptly investigate an error and resolve it
within 45 days. However, if the bank takes longer than
10 business days to complete its investigation, generally it must put back into
your account the amount in question while it finishes the investigation.
bank must notify you of the results of its
investigation. If there was an error, the bank must
correct it promptly. If it finds no error, the bank
must explain in writing why it believes no error occurred and let you know that
it has deducted any amount re-credited during the investigation. The
bank must also inform you that you may ask for copies
of documents relied on by the bank during in the
What about Loss or Theft?
important to be aware of the potential risk in using a debit
or check card, which differs from the risk on a credit card. On lost or
stolen credit cards, your loss is limited to $50 per card. On a
debit or check card, your liability for an
unauthorized withdrawal can vary:
- Your loss is limited to $50 if you
notify the bank within two business days after
learning of the loss or theft of your card or code.
- You can lose as much as $500 if you do
not tell your bank within two business days after learning of loss or theft.
- If you do not report an unauthorized
transfer that appears on your statement within 60 days after the statement
is mailed to you, you risk unlimited loss on transfers made after the 60-day
We Can Help
here to contact our office if you are
having a problem with a bank regarding a bank account.