The Electronic Fund Transfer Act (EFTA) of 1978 is a United States federal law governing earlier forms of electronic payments, such as automated teller machines (ATMs) and debit cards. Under the EFTA, consumers are protected when transferring funds electronically. These protections are intended to ensure that consumers can safely and securely make financial transactions that electronically move money from one bank or financial institution to another.

The EFTA sets the standards for credit unions, banks, and other financial institutions when it comes to electronic transfers. These organizations must adhere to the specified requirements in order to protect their customers. It is unlawful for any electronic fund transfer technology to be used without meeting the requirements specified by the EFTA.

Under the EFTA, consumers are given certain rights which must be upheld in any transaction, including:

* Consumers must be provided with information regarding the rights and liabilities they are subject to when they use an electronic fund transfer (EFT) service. * Consumers must be informed of the procedures for initiating, participating, and settling all EFT transactions. * Consumers must be made aware of any fees or other costs associated with the EFT. * Consumers must receive a written agreement containing any additional information, such as the duration of the agreement, maximum limits for withdrawals, or an opt-out option.

The EFTA also outlines the rights and responsibilities of the financial institution transferring funds. This includes keeping records of all electronic fund transfers and sharing them with consumers upon request. The financial institution must also provide a full disclosure of any fees associated. This must include an explanation of the services and any charges that may be imposed. If a consumer believes they were wrongfully charged, they can file a complaint with the financial institution.

The EFTA is an important mechanism that provides protections for consumers when transferring funds electronically. On the one hand, it safeguards the public from fraudulent activities. On the other, it helps ensure that consumers are aware of their rights and liabilities when engaging in these transactions. As technology continues to evolve, the EFTA has been updated to reflect the changes in order to provide the most up-to-date protections.