I Found an Unauthorized Charge on My Bank Account. What Are My Rights?

If you found an unauthorized charge on your bank account, you have legal rights that most consumers do not know about. The Electronic Fund Transfer Act (EFTA), codified at 15 U.S.C. § 1693, is a federal law that protects consumers from unauthorized electronic transactions and requires banks to follow a specific error resolution process when you report a problem. The law sets strict timelines for your bank to investigate, caps your liability depending on how quickly you act, and gives you the right to sue if the bank does not follow the rules.

What the EFTA Covers

The EFTA applies to electronic fund transfers, which include debit card transactions, ATM withdrawals, direct deposits, automatic bill payments (ACH debits), and person-to-person electronic transfers. If money moved in or out of your bank account electronically without your authorization, the EFTA likely applies.

The EFTA does not cover credit card transactions. Unauthorized credit card charges are governed by the Truth in Lending Act (TILA) and the Fair Credit Billing Act (FCBA), which have their own liability rules and dispute process. If the unauthorized charge is on a credit card rather than a debit card or bank account, see our page on credit card billing errors.

Your Liability Depends on How Quickly You Report

The EFTA ties your maximum liability for unauthorized transfers to how quickly you notify your bank after discovering the problem. The timelines matter, and they are strict:

• Within 2 business days: If you notify your bank within two business days of learning about the unauthorized transfer, your liability is capped at $50.
• After 2 business days but within 60 days: If you report after two business days but within 60 days of the date your bank sent the statement showing the unauthorized transfer, your liability is capped at $500.
• After 60 days: If you fail to report within 60 days after the statement was sent, you could be liable for the full amount of any unauthorized transfers that occur after the 60-day period and before you report. This is the worst-case scenario and the reason it is so important to review your bank statements promptly.

These liability caps are set out in 15 U.S.C. § 1693g and Regulation E, 12 C.F.R. § 1005.6. The key date is when you discovered or should have discovered the unauthorized transfer, not when it actually occurred.

How to Report an Unauthorized Charge

Notify your bank as soon as you discover the unauthorized charge. You can report by phone, in person, or in writing. We recommend following up any verbal report with a written notice so you have a documented record of when and how you reported the problem.

Your written notice should include:

• Your name and account number
• A description of the unauthorized transaction(s), including dates and amounts
• A clear statement that you did not authorize the transaction(s)
• The date you discovered the unauthorized activity

Send the notice to the bank's error resolution department. Keep a copy for your records. If you send it by mail, use certified mail with return receipt requested.

What the Bank Must Do After You Report

Once your bank receives your notice of error, the EFTA requires it to follow a specific investigation process under 15 U.S.C. § 1693f:

• Investigate within 10 business days. The bank must complete its investigation and determine whether an error occurred within 10 business days of receiving your notice.
• Provide provisional credit within 10 business days. If the bank cannot complete its investigation within 10 business days, it may extend the investigation to 45 calendar days, but only if it provisionally credits your account for the disputed amount. This means you get your money back (provisionally) while the investigation continues.
• Correct the error within 1 business day. If the bank determines an error occurred, it must correct it within one business day of reaching that conclusion.
• Explain a denial within 3 business days. If the bank concludes that no error occurred, it must deliver or mail a written explanation of its findings within three business days after concluding its investigation, and must make the documents it relied on available to you upon request.

Common Bank Violations

Banks do not always follow the EFTA's requirements. Common violations include:

• Failing to investigate within the statutory timeframe. The bank takes longer than 10 business days to investigate without providing provisional credit, or takes longer than 45 days even with provisional credit.
• Failing to provide provisional credit. The bank extends its investigation past 10 business days but does not credit the disputed amount to your account in the interim.
• Providing no written explanation. The bank denies the claim but does not send a written explanation of its findings or refuses to share its supporting documentation.
• Reversing provisional credit without proper notice. The bank removes the provisional credit from your account without first notifying you and providing a written explanation.
• Treating the dispute as closed without investigation. The bank tells you the claim was denied without evidence that it conducted a meaningful investigation.

Each of these failures may be an independent EFTA violation. You can learn more about common violation patterns on our unauthorized bank debits practice page.

What Damages May Be Available

If your bank violates the EFTA's error resolution procedures, you may have a private right of action under 15 U.S.C. § 1693m. Available damages include:

• Actual damages for financial harm caused by the bank's failure to follow the law, including the amount of the unauthorized transfer, overdraft fees, bounced payments, and other consequential losses.
• Statutory damages of $100 to $1,000 per consumer per action, even without proof of specific financial harm.
• Attorney's fees and costs. The EFTA's fee-shifting provision means the defendant pays your attorney's fees if you prevail. This is why most consumer protection attorneys handle EFTA cases at no out-of-pocket cost to the client.

For class actions, the EFTA provides for statutory damages up to the lesser of $500,000 or 1% of the financial institution's net worth.

Debit Card vs. Credit Card: Why the Distinction Matters

When an unauthorized charge hits your credit card, you are not out any money while the dispute is pending because you have not yet paid the bill. The charge sits on your statement and the credit card issuer investigates. Your liability for unauthorized credit card charges is capped at $50 under the Truth in Lending Act, regardless of when you report.

When an unauthorized charge hits your bank account, the money is already gone. Your checking account balance drops, and you may face overdraft fees, bounced payments, and cascading financial consequences. The EFTA's provisional credit requirement exists for exactly this reason: to put the money back in your account while the bank investigates. When a bank fails to provide provisional credit, the consumer bears the financial burden of a problem they did not cause.

What to Do Right Now

• Review your bank statements. Check your recent statements for any transactions you do not recognize. The 60-day reporting window runs from the date the statement was sent, not the date you opened it.
• Report immediately. Call your bank and follow up in writing. The sooner you report, the lower your potential liability.
• Document everything. Save copies of your statements showing the unauthorized charges, your written notice to the bank, any responses you receive, and any financial harm you suffer as a result (overdraft fees, late payments, denied transactions).
• Track the bank's response. Note the date you reported. Count 10 business days. If the bank has not resolved the dispute or provided provisional credit by then, the bank may already be in violation of the EFTA.
• Consult an attorney if the bank does not act. If your bank misses the investigation deadline, denies your claim without explanation, or fails to provide provisional credit, you may have a claim under the EFTA.

At Rausa Russo Law, we represent consumers whose banks failed to follow the EFTA's error resolution rules. The consultation is free, and for most consumer protection cases there is no out-of-pocket cost to you. Prior results do not guarantee a similar outcome.