BANK ERROR IN YOUR (DIS)FAVOR — What the EFTA Says About It
Unauthorized debit card transactions? Surprise automatic withdrawals?
You may be more protected than you think — thanks to the Electronic Fund Transfer Act (EFTA). This federal law, originally passed in 1979, gives consumers critical rights when it comes to debit cards, ATM transactions, and recurring payments. At R23 Law, our California Consumer Protection Attorneys are here to make sure you know those rights — and how to enforce them when things go wrong.
What Is the Electronic Fund Transfer Act?
The EFTA governs any transaction that pulls funds electronically from your checking or savings account. This includes:
Debit card purchases
ATM withdrawals
Online bill payments
Direct deposits
Pay-by-phone transfers
Automatic subscription charges (think: gym memberships or streaming services)
In short, if someone can take your money using a computer, phone, or magnetic strip — EFTA applies.
Your EFTA Protections: What Consumers Need to Know
Challenging Errors
If money left your account without your permission or due to a bank error, the EFTA allows you to dispute it. You typically have 45 days from the transaction to notify your bank.
Banks are required to resolve the issue within one business day or begin an investigation that must conclude within 45 days. If they can’t resolve it right away, they must report their findings within three days of the investigation’s conclusion.
Addressing Theft and Fraud
Under EFTA, your liability is capped as low as $50 for unauthorized transactions — if you report the issue within 2 business days of discovering the theft.
Wait longer? Your exposure may rise to $500. Wait more than 60 days? You could be liable for all unauthorized charges made after that point.
Pro tip from R23 Law: The faster you act, the more protected you are. Always review your bank statements regularly and report issues immediately.
Recurring Payments & Auto-Charges
If you’ve ever struggled to cancel a gym membership or a recurring app charge, the EFTA offers a legal remedy. You can revoke authorization for automatic debits at any time by:
Notifying the company in writing or over the phone.
Telling your bank you've revoked authorization.
Issuing a stop payment order at least 3 business days before the next scheduled withdrawal.
If charges continue after this, your bank must investigate and potentially refund the unauthorized withdrawals.
R23 Law Protects Victims of Unauthorized Transactions
At R23 Law, our team of California Consumer Protection Attorneys fights for consumers who have been victimized by unauthorized transactions, bank errors, or hidden recurring charges. We’ve helped clients:
Recover funds lost due to unauthorized debit card use
Halt illegal recurring withdrawals
File lawsuits under the EFTA when banks or merchants violate consumer rights
Our legal team is especially experienced in matters involving identity theft, fraudulent debits, and electronic transfer disputes.
Covered Transfers Under the EFTA Include:
As shown on Page 2 of the source document, the EFTA covers a wide range of electronic activity, such as:
ATM transactions
Online bill payments
Pay-by-phone services
Debit card purchases
Electronic check conversions
Direct deposits & pre-authorized debits
Even payments made over the phone using a debit card fall under EFTA’s protective umbrella.
Why These Laws Matter More Than Ever
In today’s digital economy, most financial transactions happen electronically. That means more opportunities for errors, fraud, or unauthorized access — especially for vulnerable populations like seniors, low-income consumers, or identity theft victims.
Unfortunately, many banks fail to properly respond to consumer complaints or drag their feet during investigations. That’s when R23 Law steps in.
When to Call R23 Law’s California Consumer Protection Attorneys
Don’t assume the bank has the final word. If you’ve experienced:
A stolen debit card with fraudulent charges
Recurring withdrawals you never authorized
A denied refund after a dispute
A bank investigation that went nowhere
You may have grounds for legal action under the EFTA. You could be entitled to:
Full reimbursement of unauthorized transactions
Punitive damages (up to $1,000)
Attorney’s fees and court costs
Let R23 Law’s California Consumer Protection Attorneys review your case. We specialize in electronic banking claims, recurring payment disputes, and identity theft recovery.
Don't Let the Bank Bounce Your Rights
The Electronic Fund Transfer Act was built to protect everyday consumers — but it's only powerful if you know how to use it.
At R23 Law, we don’t just know the law — we know how to enforce it. If your bank failed to protect your rights, we’re ready to fight for you.
📞 Contact R23 Law today for a free consultation with a California Consumer Protection Lawyer who knows the ins and outs of the EFTA.
