NCJ Number
84217
Date Published
Unknown
Length
0 pages
Annotation
Regulation E of the Electronic Fund Transfers Act is designed to protect consumers who use access devices or electronic fund transfers (EFT) cards. A Federal Reserve System representative discusses consumer and financial institution liability under Regulation E and points out differences between Regulations E and Z of the act.
Abstract
Regulation E regulates disclosures of account terms, prescribes rules for unsolicited issuance of access devices or EFT cards, and limits consumers' liability for unauthorized use of these devices. It also requires that consumers be given documentation of their transactions and prescribes error resolution procedures. Whereas Regulation E governs transactions involving consumers' own funds, Regulation Z covers consumer credit transactions only. The act covers all financial institutions using electronic systems to access consumer deposit accounts. Financial institutions can be held liable for failure to comply with this act unless consumers had insufficient funds in their accounts, funds were subject to legal process, failure was caused by an act of God or other circumstances outside of the institution's control, or for other reasons. Financial institutions are liable for actual damages or for individual damages of between a minimum of $100 and a maximum of $1,000. In class actions, the damages would be up to a maximum of the lessor of $500 or 1 percent of the institution's net worth. In deciding individual and class action cases, the court looks at the frequency and persistence of violations, nature of the violation, the extent of which the violation is intentional, and other factors. Consumers can recover court costs and attorneys' fees if they win the case. Additional liability rules are mentioned.