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Your Electronic Banking Rights and Protections

While we used to put money in and take money out of our bank accounts with a real live human at the bank, things have changed almost completely with electronic banking. The convenience of being able to bank when you want and where you want has made driving up to your bank’s drive-thru window much less common.

Though there are many benefits to banking in a more modern way, there are some risks that you should also be aware of. Your accounts and your finances could be compromised, but fortunately, there are some legal protections in place. A Florida identity theft attorney can help prepare your legal options in the event electronic banking compromises your information.

Federal Electronic Funds Transfer Act (EFTA) of 1978

The EFTA, also known as the Reg E or Regulation E, is a federal law providing some protections for consumers. The hope is this law will protect consumers from fraud and from account errors. Most transactions are covered, with a few notable exceptions.

The EFTA became necessary when electronic payments began to gain popularity. Debit card payments and online money transfers are protected. Because of the EFTA, consumers can dispute transactions. When transactions are unauthorized on an account, consumers have a way to protect themselves. 

Listed below are some examples of protections offered by the EFTA:

  • Your account is protected if your debit card is taken and used by a thief
  • If your money is transferred from your bank account using Zelle because your account information was stolen
  • If a service you subscribed to continues to charge you, even after you have taken measures to cancel your account
  • If you are robbed at an ATM machine, forcing you to withdraw money from your account, you are protected.
  • If your bank makes an error, you are protected.

The EFTA also furnishes some structure when it comes to overdraft protection. Banks cannot charge you an overdraft fee without you agreeing to it. This means that they have to offer you overdraft protection, and you have to sign up for it to be charged an overdraft fee. If you do not sign up for this service, your card will be declined, rather than causing you to overdraft your account if you do not have money to cover the use. 

The EFTA covers debit cards but not credit cards. They are covered by the Fair Credit Billing Act

Problems Electronic Banking Can Cause

Electronic fund transfer (EFT) is a common use of electronic banking. There are easy ways to manage your money, and though it is convenient, it can lead to fraud and theft. Common examples of EFT are as follows: 

  • ATM deposits and withdrawals
  • Direct deposits
  • Online banking
  • Debit card usage

There are some problems that can occur when these services are used. Some of the more common ones and how they can be handled are discussed below. 

How to Handle Banking Errors 

Though most of us are not consistent about reviewing our banking transactions, unless there is a very noticeable issue with it, we probably should. When banking errors happen with your debit card, direct deposits, or other issues, contact your bank. You have 60 days to let them know there has been an error. 

After you give them notice, the bank has ten days to investigate the error, determine whether there was one and come up with a solution. In specific circumstances, the bank may be permitted 45 days to investigate. However, during this time, the bank must credit them back the money they lost. 

Handling Card Theft or Loss

If your ATM or debit card has been stolen, report its loss promptly. If you can file a report before a transaction occurs, you will not bear any of the liability for money stolen from your account. If you wait to report the card for two business days after it goes missing, you can be held responsible for up to $50. 

If you fail to report the debit card was stolen or lost for 60 days, you may be on the hook for up to $500. If you do not report your card when it is stolen, you cannot recover any of what was stolen from your account.

Overdrafts and How They Are Managed

If you make a purchase with your debit card and do not have the money to cover it, you can be charged overdraft fees. Though, only if you agree to it. That sounds ridiculous, right? Nobody would agree to fees. 

Strangely enough, many people do. What happens is you sign up for overdraft protection. This is presented as a service so that your bank will cover any overdrafts. Without this protection, your card would simply be declined once you were out of money. 


If you order something or buy something using your debit card, your purchase is protected. If the item you ordered fails to arrive or arrives with a defect, the EFTA makes it possible for you to stop the payment so you are not charged for the problematic purchase.

Rights and Responsibilities are Important to Understand

Reading the fine print is not something most of us do, even though we know we should. However, when opening a bank account, understanding these regulations can save you a lot of headaches later. 

Know your rights and pay close attention to your bank statements. You have a limited amount of time to make corrections when they are necessary, so it is crucial to know when and how that should be done. 

Contact Us If You Having Questions About Your Electronic Banking Rights

We all participate in electronic banking, so it is important to understand your rights. Even if you do not, our experienced legal team at Sharmin & Sharmin Attorneys at Law is ready to help you navigate the challenging obstacles you may face if there is a problem. 

Our electronic banking rights attorneys are ready to review your case. Our job is to ensure that our clients’ rights are protected and that you understand your options and the best way to proceed. Use the form on our website to give us some information and to make an appointment for a free consultation.

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