CFPB EFT FAQ Error Res Unauth EFTs 3 – Is an EFT from a consumer’s account initiated by a fraudster through a non-bank P2P payment provider considered an unauthorized EFT?

Compliance > Regulation E - EFTA
Q:  Is an EFT from a consumer’s account initiated by a fraudster through a non-bank P2P payment provider considered an unauthorized EFT?
 
A:   Yes. Because the EFT was initiated by a person other than the consumer without actual authority to initiate the transfer – i.e., the fraudster – and the consumer received no benefit from the transfer, the EFT is an unauthorized EFT. 12 CFR 1005.2(m). This is true even if the consumer does not have a relationship with, or does not recognize, the non-bank P2P payment provider.
 
 
This Q&A was contained in the CFPB’s Electronic Fund Transfers FAQs that were updated in December 2021 (which may be updated from time to time).  This may be found on the CFPB’s website here:  https://www.consumerfinance.gov/compliance/compliance-resources/deposit-accounts-resources/electronic-fund-transfers/electronic-fund-transfers-faqs/
 

Add Feedback