EFTA Violations

At Consumer Justice Law Firm, we help you recover from the harmful consequences of Electronic Fund Transfer Act (EFTA) violations by upholding and protecting your rights under federal and state law. While this federal law plays a key role in many identity theft scenarios, it is also a standalone practice area that warrants exploration all its own. We enforce your rights under the EFTA and do everything the law allows to hold financial companies accountable for the reckless way they handle your data. 

Justice for victims of EFTA violations looks like this:

Making financial and credit reporting companies

1fix their mistakes
2pay you compensation for the harm they caused, and
3pay for your legal bills because you had to force them to do the right thing

What EFTA Violations Are

The Electronic Funds Transfer Act is federal legislation that regulates the transfer of money electronically and gives you legal rights when disputing unauthorized or inaccurate entries or activity. EFTA applies to any transaction that is electronic and directly tied to the transfer of money from your bank or other financial account. It includes things like: (1) point of sale debit card transactions (when you swipe, tap, or insert), (2) ATM transactions, (3) direct deposits, (4) auto pay transactions (paying your bills by linking to your bank account), (5) peer-to-peer transactions using money apps (Venmo, Zelle, CashApp, etc.), (6) online and over-the-phone payments directly from your bank account or using your debit card, and (7) electronic check conversion.

It does not apply to credit card transactions, which are covered under the FCBA. 

How EFTA Violations Harm You

EFTA violations harm you in two ways: (1) The primary harm caused by the immediate loss of money from your account. Whether the money is stolen, lost, or reported incorrectly, it means you do not have access to the funds you should. (2) The continuous, slow-rolling hits that just keep coming when EFTA violations aren’t fixed. Missing money typically means you can’t pay bills. This snowballs quickly. 

  • Empty accounts. Fraudulent activity or statement errors at their worst lead to bank accounts that are wiped out completely.
  • Balance statements riddled with bad data. Having your balances zeroed or shrunken through fraudulent activity or statement errors means your bank statements are wrong.
  • Bad credit reports and a credit score drop. When your bank statements aren’t corrected following fraud or errors, you typically can’t pay bills. These debts may end up on credit reports, damaging your credit worthiness and unfairly dropping your score.
  • Debt collections. If you can’t pay off debts, those accounts could unfairly end up in collections.
  • Reputational damage. Financial and credit reporting damage rarely stays between you and the agency reporting it. In fact, credit reports are made to be used by decision-makers. Anyone seeing yours while it’s full of data generated by fraud or inaccuracies will assume the worst.
  • Mental and emotional distress. From missing out on long-awaited opportunities to losing sleep due to worry or being plagued by anxiety, the toll these violations take is real.

Steps To Take After Discovering EFTA Violations

Step 1 Let the bank and other financial companies know

Carefully review your activity statement from every bank or financial company (like peer-to-peer platforms). Note every instance of unauthorized or inaccurate transactions, no matter how small. Notify the fraud department as soon as possible. 

Step 2   File a confirmation of the dispute by mail

Even if your phone calls initiated a formal dispute of the transactions, you should confirm your conversations and file everything in writing. File by certified mail and keep copies of everything, including the mailing receipts and all documents sent.  

Step 3   File a criminal report & get an attorney

If you’re dealing with fraud, it’s a good idea to file a police report as close in time to the discovery of the fraud as possible. While the police may decline to pursue an investigation, filing a criminal report helps establish and lock down the facts in an official document. If your dispute doesn’t help or you need guidance through the whole process, an EFTA lawyer is the help you’re looking for.

How An EFTA Attorney Leads You to a Full Recovery

Not every EFTA case ends in a lawsuit, but many do. Litigation usually becomes necessary when financial companies and consumer reporting agencies simply fail to do the right thing. Seemingly simple things, like being notified of fraudulent or unauthorized transactions, that should have a relatively straightforward solution, become prolonged and painful battles.

Knowing when, how, and who to sue is everything. Here’s how we help you:

  1. We know the law. We know the laws that protect you and how to go after these careless mega-corporations using every possible legal option available. 
  2. We know the problems. We’ve seen, heard, and handled every type of consumer fraud and credit reporting problem and put our full knowledge and resources into everything we do. 
  3. We know the tricks. We know the tactics used by these companies to delay doing anything to fix financial or reporting mistakes. They’d rather convince you it’s a lost cause. We know otherwise.
  4. We provide legal guidance.  We help you gather necessary data and evidence, craft and file legally sound disputes, and advise you of your rights and best practices along the way.
  5. We file a lawsuit. If the fraudulent transactions aren’t removed, mistakes aren’t fixed, or the credit reporting errors aren’t corrected, we file a lawsuit to hold companies accountable. We might sue companies that (a) failed to use adequate methods to prevent, investigate, or correct bad data generated by fraud, (b) engaged in harassment (such as unscrupulous debt collectors) for non-payment of real debts as a result of the fraud, (c) failed to act within the legal time frame for investigating and fixing disputed transactions and data, and (d) received notice of fraudulent transactions but continued to report the false information anyway. 
  6. We get you money.  If you’ve been harmed by fraud, errors, and bad data and you’re entitled to compensation, we know how to maximize it.

The Role of the Electronic Funds Transfer Act

Mistakes tied to your bank and peer-to-peer accounts have consequences that can spread through your full financial and credit profile quickly. Because these types of errors are part of a persistent, systemic problem, and because they cause genuine harm to people every single day, the federal government passed an important piece of legislation- the Electronic Funds Transfer Act (EFTA) to try to protect you.

We rely heavily on the EFTA (along with the Fair Credit Reporting Act) to build the best possible cases and get the best possible outcomes. The EFTA gives you critical consumer rights, including the right to: 

  • know all fees associated with the transactions in your accounts, including ATM and overdraft fees
  • have limits on the total daily funds that can be withdrawn from an account
  • report fraud by phone, email, or even in person at your local bank branch
  • dispute unauthorized transactions or incorrect balances and fees (within 60 days or the transaction posting to your billing statement)  
  • face limited liability for confirmed unauthorized transactions (your limit of liability is tied to how quickly you report the transactions, so act quickly!)
  • have the dispute investigated within 10 business days and know the results of the investigation within 3 days
  • have the money credited back to your account (minus any amount you’re liable for)

How to Dispute EFTA Violations

  • Act quickly to dispute fraudulent transactions. There are critical statutes of limitations involved in disputing fraud, and typically the date that sets everything in motion is the statement date on which the criminal activity is first reported. Once you notice something is off, jump into gear getting things locked down and disputed. 
  • Review your credit reports and financial statements for mistakes and unauthorized activity. 
  • Gather any evidence and documentation you have to support your dispute. This should include the police report (if filed) and any communications with the companies (such as notes from when you filed a fraud alert).
  • Follow the rules for the specific financial company whose data you’re disputing.  
  • Write a thorough and clear letter explaining exactly which information in your credit  report or financial statement is wrong and why.
  • Mail your letter, along with copies of the supporting documents, via certified mail to the credit reporting and financial companies. This preserves your rights and leaves an easily traceable trail. Avoid using online dispute platforms.
  • Keep a copy of the letters and documents for your file, along with the mail receipts.
  • Track the days. Credit bureaus have 30 days to respond. 
  • Don’t give up. If they don’t respond, don’t investigate, don’t fix the errors, or claim that their investigation confirmed the bad data and fraudulent activity, you need a lawyer NOW.

One of the most important and least known facts about embarking on the EFTA violation recovery journey is that you don’t have to pay out of pocket for legal help. Under the EDTA and FCRA, you are not expected to spend your own money or take on debt just to dispute unauthorized transactions and reporting errors and demand corrections of your data since you didn’t create the problem in the first place. The ones who made the problem have to pay to fix it. 

At Consumer Justice, we respect this fee-shifting provision for the role it plays in our legal system, especially since it serves as an equalizer, bringing justice to everyone, including those who otherwise couldn’t afford to work with an attorney. We value each and every client and every case, and appreciate that the law has carved out a way to center equity and fairness in legal representation for consumers harmed by big business data errors. 

Frequently Asked Questions

Should I file a police report for unauthorized banking transactions?

Yes, if the transactions are related to suspected fraud. If you are disputing ATM fees with your bank, that would not warrant a police report. But if you have unrecognized and unauthorized transitions on your bank statements, within your peer-to-peer accounts, or anywhere tied directly to your actual funds, you should file a police report as soon as possible. If you are the victim of identity theft and identity fraud, the police may choose to investigate for potential criminal prosecution. And, regardless, the police report can play a key role in helping so ensure you recover any stolen money and clear up related errors on your credit reports.

Is PayPal covered under the EFTA?

PayPal can be a tricky one to figure out and the laws that apply may depend on how you use the app. For instance, if you link your credit cards through PayPal in order to make more secure online purchases, those transactions are covered under the Fair Credit Billing Act (FCBA). However, if you link your bank account to PayPal in order to receive payments for work performed or any other purpose, those transactions would likely fall under the EFTA. The good news for you is that if you have any errors or unauthorized activity through your PayPal account, whether it impacts your credit cards, bank accounts, or both, we can help you sort it out, return your finances and credit reports to good, and get you compensation if you’re entitled to i.