Regulation E, as it is frequently called, specifies the Federal Reserve Boards administrative rules resulting from passage of the Electronic Fund Transfer Act by Congress in 1978. The regulation creates the rights, liabilities and responsibilities of those involved in electric fund transfers (EFTs), and shields consumers from liability when they utilize EFT systems. The rules and procedures for
. EFTs are contained in Regulation E, along with guidelines for parties who sell or issue electronic debit cards. Consumers experiencing fraud through unauthorized card usage are protected by Regulation Es rules. Additionally, financial institutions who supply EFT cards are required to publish, annually, the terms and conditions associated with the cards under the regulation. In terms of consumer fraud protection, consumers suspecting unauthorized use of EFT cards are encouraged by Regulation E to contact the issuing financial institution no later than 60 days of the suspected foul play. The consumer must prove their name, account number and information regarding the error in writing within 10 days of reporting. In response, the financial institution must promptly investigate and resolve the error within 45 days, with extra investigatory time extended to 90 days for new accounts, POS transactions and foreign transactions. Should an investigation require more than 10 business days to resolve, the account in question should be refunded the amount of the suspicious transaction. After 45 or 90 days or a determination of the existence of an error, the financial institution is required to notify the customer in writing and if necessary, deduct the refund provided in the first 10 days. For consumers, Regulation E limits total liability for erroneous or fraudulent transactions to 50 dollars if they report the instance within two business days or to 500 dollars if they report between three and 59 days. Regulation E does not cover some EFT transactions like bank transfers; it also does not allow consumers the right to stop payment on transfers. http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=635f26c4af3e2fe4327fd25ef4cb5638&tpl=/ecfrbrowse/Title12/12cfr205_main_02.tpl or http://www.bankersonline.com/regs/205/205.html
