Electronic Fund Transfer Act

An EFT, also referred to as an Electronic Fund Transfer, enables the transfer of funds for the payment of goods or services in an electronic manner. It is safe, secure and efficient, while also being incredibly cost-effective. In order to be entirely effective, the Electronic Fund Transfer Act was introduced in 1978, to outline the responsibilities of merchants and ascertain the rights and liabilities of consumers.

Features of the EFT Act

The Electronic Fund Transfer Act was implemented in 1978 under the approval of the U.S Congress. The purpose of the act was to ensure that consumer rights were effectively met and to also make certain that merchants were correctly carrying out all EFT activity. Nevertheless, the primary intention of the act was to protect the rights of individual consumers.

The Electronic Funds Transfer Act aims to focus on transactions that originate from electronic devices, such as a computers or electronic terminals. Other transactions of focus include ATMs, point of sale (POS) transfers, ACH systems, telephone transfers and direct deposits or withdrawals.


The EFT Act covers a number of rules and regulations, in a bid to protect consumers at the utmost level. Under the Act, where a customer wishes to declare an error in payment, they are required to notify the relevant financial institution immediately and provide their account details. The error must be clearly explained, including the date of occurrence and the amount of money in question, in order for the transaction to be reimbursed. Financial institutions are required to investigate all errors in a swift manner, in order to provide a solution to the error within a 45-day period.

There are a number of transactions that are not covered under the act, including activity carried out through the use of store gift cards. In order to ascertain whether or not you are protected, it is important to refer to the EFT Act for more information.