Electronic Fund Transfer Act

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Definition of 'Electronic Fund Transfer Act'

The Electronic Fund Transfer Act (EFTA) is a federal law that governs electronic funds transfers (EFTs). EFTs are transactions that are initiated through an electronic device, such as a computer or a mobile phone. They include things like direct deposits, bill payments, and online banking.

The EFTA was enacted in 1978 to protect consumers from fraud and abuse in the EFT system. The law establishes a set of rules that financial institutions must follow when they process EFTs. These rules include:

* Providing consumers with clear and accurate information about their EFT rights and responsibilities.
* Giving consumers the opportunity to opt out of certain types of EFTs, such as automatic bill payments.
* Resolving consumer complaints about EFTs quickly and fairly.

The EFTA also provides consumers with a number of protections in the event of an EFT error. For example, if a consumer receives an incorrect EFT, the financial institution must correct the error and refund any money that was lost.

The EFTA is an important law that helps to protect consumers from fraud and abuse in the EFT system. If you have any questions about your EFT rights and responsibilities, you should contact your financial institution.

In addition to the protections that the EFTA provides, there are a number of things that consumers can do to protect themselves from EFT fraud. These include:

* Using strong passwords and security measures to protect their online banking accounts.
* Never sharing their EFT account information with anyone they don't know or trust.
* Being suspicious of any emails or phone calls that ask for their EFT account information.
* Reporting any suspicious activity to their financial institution immediately.

By following these tips, consumers can help to protect themselves from EFT fraud and ensure that their EFTs are processed safely and securely.

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