As digital banking becomes central to daily life, scams involving electronic funds transfers (EFTs) are increasingly common. The Electronic Funds Transfer Act (EFTA) is a powerful federal law designed to protect consumers from unauthorized electronic transactions. Below, learn how common scams work, the key deadlines to act on your rights, and what damages you may recover through an EFTA lawsuit.

Most Common EFTA-Related Scams

Several sophisticated fraud schemes put your bank accounts at risk, including:

  • ACH Kiting: a type of financial fraud where fraudsters exploit the delay in Automated Clearing House (ACH) transactions to juggle funds between different bank accounts. By moving money back and forth, they create the illusion of a valid balance, withdraw funds, and then disappear before the initial transaction is fully processed. This scam relies on the fact that ACH transfers are not instantaneous and take one to a few business days to complete.
  • Fake Payments and Invoices: Scammers impersonate trusted parties or manipulate payment instructions, diverting legitimate payments into their own accounts.
  • Impersonation Scams: Criminals pose as bank employees or trusted businesses to convince consumers to authorize transfers under false pretenses, sometimes exploiting security procedures themselves.
  • Phishing and Social Engineering: Phishing emails and phone calls are used to obtain access information and initiate unauthorized EFTs. ​

EFTA Deadlines and Time Limits

The EFTA creates a strict timeline for reporting unauthorized transfers—missing these deadlines can greatly limit your rights:

Action by Consumer Reporting Deadline Maximum Liability
Report loss/theft of access device Within 2 business days $50
Report after 2 days but within 60 calendar days Within 60 days of bank statement $500​
Report after 60 days After 60 days of
first statement		 Unlimited​
Unauthorized transfers (no device loss) reported Within 60 days $0​

If you don’t review your bank statements and report unauthorized transfers within 60 days, banks generally aren’t required to reimburse you for further losses. ​

How EFTA Lawsuits Work

If your bank refuses to resolve an unauthorized transfer or fails to investigate your claim under EFTA, you may have grounds for a lawsuit. EFTA mandates that banks:

  • Investigate reported errors within 10 business days (or up to 45 days if provisional credit is provided). ​
  • Provide written results and correct errors promptly if your claim is validated.​

If banks fail to meet these requirements, consumers can sue for damages. Lawsuits must generally be filed within one year of the violation.

Recoverable Damages Under the EFTA

Consumers prevailing in an EFTA lawsuit may recover:

  • Actual damages (reimbursement of lost funds related to unauthorized EFTs).
  • Statutory damages up to $1,000.
  • Court costs and reasonable attorney’s fees.

Banks may face additional penalties for willful or repeat violations. However, failing to notify your bank promptly can eliminate or reduce your recovery.

Protecting Yourself From Scams

To protect your rights:

  • Review account statements every month.
  • Report suspected unauthorized transactions immediately.
  • Never reveal your banking credentials to anyone.
  • Confirm all requested payment changes directly with trusted contacts.

For legal help recovering from an Electronic Funds Transfer Act scam or for a free case evaluation, contact Nahoum Law today.