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EFT Errors (Electronic Funds Transfer)

EFT is not a perfect system; therefore customers should still be diligent in reviewing your EFT statements for possible errors, as you would with any other type of transaction. Should you notice that there has been an error in an electronic fund transfer relating to your account certain steps must be taken.

Under the Act the Customer must:

  • Write or call the financial institution immediately if possible
  • Must be no later than 60 days from the date of erroneous statement
  • Give name and account number
  • Explain why you believe there is an error, the type, dollar amount and date
  • May be required to send details of error in writing within 10 business days

Under the Act the Financial Institution must:

  • Promptly investigate the error and resolve it within 45 days
  • Errors involving new accounts (opened last 30 days), POS transactions, and foreign transactions may take up to 90 days
  • If takes > 10 business days to complete investigation:
    • Must recredit the amount in question
  • For new accounts may take up to 20 business days to recredit the account
  • Must notify customer of the results of investigation:
    • If there was error – correct it or make recredit final
    • If no error – explanation in writing, notify customer of deducted recredit
  • Customer has the right to ask for copies of any documents relied on in the investigation.

Loss or Theft: Customer Liability

If a customer reports the card missing to our institution before any transactions occur, you are not held responsible. A customer can be liable for unauthorized withdrawals if your EFT card is lost or stolen and you do not follow certain criteria:

  • Loss is limited to $50 if institution is notified within two business days
  • If loss is not reported within 60 business day's customer risks unlimited loss on transfers made after the 60 day period – could lose all money in account plus maximum over draft if any.

Financial Institution Liability

The financial institution must give the customer notice of their liability in case the card is lost or stolen. This must include a phone number for reporting the loss and a description of its error resolution process.

What the EFT Act Covers

  • The EFT Act does not apply to automatic transfers from any account held to another account the consumer uses.
    • An example of this would be where the EFT Act would not apply to any automatic payments put toward a mortgage held by the financial institution where a consumer has their electronic funds account.
  • The EFT Act would also not apply to automatic transfers between consumer's accounts at a specific financial institution.
  • The EFT Act also does not cover all transfers. Prepaid cards may not be covered.
  • Examples of these include store gift cards, and prepaid telephone cards.
  • When using electronic funds transfer, you do not have the right to stop payment.
  • State law or any contract that imposes a lower liability limit than those mentioned in the "Loss or Theft: Customer Liability" will be preempted (overridden) by the federal EFT Act unless the state law provides protections that are greater than that provided under Federal law. (See Section 919 of the Act)

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