CFPB Provides Additional Guidance On "Unauthorized Electronic Fund Transfers"

The Electronic Fund Transfer Act (the "EFTA") was enacted for the purpose of protecting consumers and limiting their liability when transferring funds electronically. The EFTA, as implemented by Regulation E, is administered by the Consumer Financial Protection Bureau (the "CFPB"), a U.S. government agency aimed at protecting consumers in the financial industry. Due to continuous developments in electronic banking capabilities and the COVID-19 pandemic, electronic fund transfers ("EFT") have become an increasingly important means of transferring consumer funds. Online transactions, however, increase the risk to both consumers and financial institutions of fraudulent access to consumer accounts. In light of this risk and the growth of online transactions, the CFPB recently clarified and updated its guidance regarding "unauthorized electronic fund transfers" in its Electronic Fund Transfers FAQs (updated June 4, 2021), available here (the "FAQs").