Electronic Funds Transfer Act

AAA

DEFINITION of 'Electronic Funds Transfer Act'

A federal law that protects consumers engaged in the transfer of funds through electronic methods. This includes the use of debit cards, automated teller machines and automatic withdrawals from a bank account. The act also provides a means of correcting transaction errors and limits the liability from any losses due to a lost or stolen card.

INVESTOPEDIA EXPLAINS 'Electronic Funds Transfer Act'

This law was passed in 1978 as a result of the growth of electronic ATM machines and electronic banking. The use of paper checks has steadily declined since then, but the check served as hard evidence of payment. The explosion of electronic financial transactions created a need for new rules that would give consumers the same level of confidence that they had in the checking system. This includes the ability to challenge errors and correct them within a 60-day window, and to limit liability on a lost card to $50 if the card is reported as lost within two business days.

RELATED TERMS
  1. Debit Card

    An electronic card issued by a bank which allows bank clients ...
  2. Consumer Liability

    The accountability put on consumers to not act in a negligent ...
  3. Electronic Money

    Electronic money is money which exists only in banking computer ...
  4. Credit Card

    A card issued by a financial company giving the holder an option ...
  5. Wire Transfer

    An electronic transfer of funds across a network administered ...
  6. Transfer

    A change in ownership of an asset, or a movement of funds and/or ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Credit & Loans

    Debit Card Fraud: Is Your Money At Risk?

    As criminals are becoming more savvy, your money is becoming more vulnerable.
  2. Budgeting

    Should You Pay In Cash?

    Avoiding all forms of plastic payment can do wonders for your stress level and pocket book.
  3. Economics

    What's Expansionary Policy?

    Expansionary policy is a macroeconomics concept that focuses on expanding the economy to counteract cyclical downturns. Expansionary policy can be implemented in one of two ways, or a combination ...
  4. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  5. Economics

    Popular Places Where U.S. Citizens Need A Visa

    A U.S. passport will get you into many countries, but not everywhere. Here's how to visit five of the most popular destinations that require visas.
  6. Economics

    Are You the Victim of Unfair Labor Practices?

    If you are a union member, a union leader, or a manager at a company with an established union, you should understand unfair labor practices.
  7. Economics

    What's a Subsidy?

    A subsidy is a benefit given to an individual, business or institution, typically by the government. Subsidies are given to promote a social good or an economic policy. The government usually ...
  8. Investing News

    What Affirmative Action Means for Regular Business

    What Affirmative Action means for your businesses today.
  9. Economics

    What does Current Account mean?

    The current account reflects the difference between a country’s savings and investments.
  10. Economics

    Will Alex Tsipras Change The European Economy?

    A debt default and a Euro exit by Greece's leaders would likely cause more harm to Greece's economy than to the EU, of which Greece is just a small part.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center