Your Rights as an EFT Customer

EFT Customer?s Rights

Like anything else, electronic fund transfers are subject to error. A malfunction in a computer or a mistake by a programmer could, for example, transfer $1,000 from your account to the account of your utility company when in fact your bill was $100. If you lose your automatic teller card and it is found by someone who discovers your personal identification number, that person is in a position to empty your account. To protect bank customers and banks alike, Congress passed the Electronic Fund Transfer Act, which is implemented through Regulation E of the Federal Reserve Board. Following are your rights as an EFT customer.

Statement of Terms. When you open an account with an EFT feature, you are entitled to receive a statement listing all of the terms and liabilities associated with the account.

Receipt. Both automatic teller machines and point of sale terminals must provide you with receipts of all transactions. A receipt includes information on the amount of money transferred, the date of the transfer, the type of account from which the money was withdrawn or in which it was deposited, the name of any financial institution or other party to which funds were transferred and the number of the encoded card that was used to make the transfer.

The monthly statement you receive from the bank must also list all transfers, giving their amounts and dates, including information on preauthorized transfers and those made via telephone. The statement must include the names of the holders of accounts to which you made EFT payments and show all bank fees involved, as well as your balances during the period covered. In addition, it must specify the name and address of the person to whom inquiries are to be directed.

Remember that electronic fund transfers, unlike checks, are recorded immediately and thus should be noted immediately in your deposit and withdrawal records. For example, if you make a POS payment from your checking account directly to a merchant’s, you must have the money available in your account if you are not to be charged for an overdraft.

On the other hand, if you have authorized an EFT transaction in advance, you can stop it, either by oral or written notice, provided you act at least three days before the transfer is scheduled to take place.

If a bank fails to make an EFT transfer when it has been authorized to do so and when the depositor has sufficient funds to cover the transfer; or if it fails to stop payment when it has been properly instructed to do so, it may be held liable for any damages caused to the depositor.

See also Electronic Fund Transfers and EFT Errors Settlement