What is the Electronic Funds Transfer Act?
The Electronic Funds Transfer Act (EFTA) is federal law that regulates the use of electronic payments and transactions, including credit cards. It covers a variety of activities like ATM usage, debit card purchases and direct deposits. The EFTA was passed in 1978 and is enforced by the Federal Reserve Board and the Consumer Financial Protection Bureau. In California, the EFTA protects consumers by enabling them to stop payments and obtain refunds under certain circumstances. For example, if you unknowingly bought a defective or counterfeit item with your credit card, you may be able to dispute the transaction and receive a refund if the seller does not provide a satisfactory resolution. The EFTA also limits the amount of liability a consumer can incur in the event of unauthorized use of his credit card. Generally, the cardholder will not be held responsible for any transactions that take place using his credit card without his permission. Finally, the EFTA protects cardholders by requiring banks and other institutions to disclose their fee structures prior to initiating an electronic transaction. This ensures that customers understand the terms and conditions associated with the transaction, allowing them to make informed decisions. Overall, the Electronic Funds Transfer Act is a federal law that provides individuals and residents of California with certain protections when they use electronic payment methods. It allows consumers to dispute transactions, limits their financial responsibility in the event of unauthorized use and requires financial institutions to disclose their fee structures so that customers can make informed decisions.
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