Future Planning

Are Your Electronic Bank Transfers Protected?

Online banking is convenient, but fraud happens. That’s where Regulation E steps in.
Are Your Electronic Bank Transfers Protected?
While convenient, electronic banking can carry risks. Kite_rin/Shutterstock
Anne Johnson
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The electronic banking system has brought significant changes in how money is handled. You can transfer money on your phone or the bank’s website. It’s like having a bank in your pocket. What can be more convenient?

But hackers and identity thieves are creative, so, unfortunately, things can go wrong. You could be the victim of banking fraud or errors. However, you have some protection through a federal rule called Regulation E.

Electronic Fund Transfer Act Protects Your Money

The Electronic Fund Transfer Act (EFTA) of 1978, implemented through Regulation E, is a federal regulation that protects consumers when problems happen with electronic fund transfers (EFTs). Transactions covered under Regulation E include:
  • ATM transfers
  • direct deposit transactions
  • automated clearing house transfers
  • debit card transactions
  • telephone transfers
According to the Federal Trade Commission (FTC), Regulation E requires financial institutions to adopt certain practices respecting such matters as transaction accounting and error resolution.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.