The Consumer Financial Protection Bureau argued in a court filing that online-initiated wire transfers are subject to the Electronic Fund Transfer Act and Regulation E, even though the law exempts transfers made by banks “by means of” a wire service.
About the Case: As the CFPB noted in a new blog post:
The state of New York is suing Citibank for not fully reimbursing customers who told the bank that scammers had stolen money by initiating wire transfers from the consumers’ accounts online.
Citibank has argued that the EFTA doesn’t apply because the scammers used a wire transfer to take the money and the law exempts transfers made by banks “by means of” a wire service.
The EFTA limits consumers’ liability for losses to $50 so long as they promptly notify their bank that access to their account has been stolen.
CFPB Response: In a friend-of-the-court brief, the CFPB said:
The EFTA excludes only bank-to-bank wire transfers.
When banks connect wire transfer capabilities to consumer-facing online banking platforms, an online-initiated wire transaction meets the definition of an “electronic fund transfer.”
Thus, only the bank-to-bank wire portion of that transaction is excluded from EFTA and Reg E.
