Responsibilities of Financial Institutions - About Processor
Date: Sun, 05/11/2008 - 07:02
According to Section 910 of the Electronic Funds Transfer Act, a financial institution may be held liable for damages caused by failing to acknowledge a stop payment. It is also illegal to initiate an ACH debit to an account that has had a transaction returned "Account Closed" or "Stop Payment". If you have a bank statement or other documentation that this has happened to you, and caused damage, this is the type of information a processor needs to see. Explain to them that their client has failed to follow the EFTA and, as their financial representative, you will hold them responsible. Please post any questions you may have about this, but the law is very clear cut. If you have documentation that you have revoked authorization and your bank is still charging you, provide your bank manager, not some idiot, with a copy of the EFTA section posted below and inform your bank that you expect them to credit returned item fees caused by this.
Finally, when you revoke authorization with a pdl, be certain to notify the processor as well as your bank manager. Make sure you notify your bank manager via email so there is documentation. Do not do this through a general customer service email box or a human you can not hold responsible.
§ 910. Liability of financial institutions
(a) Subject to subsections (b) and (c), a financial institution shall be liable to a consumer for all damages proximately caused by--
(1) the financial institution's failure to make an electronic fund transfer, in accordance with the terms and conditions of an account, in the correct amount or in a timely manner when properly instructed to do so by the consumer, except where--
(A) the consumer's account has insufficient funds;
(B) the funds are subject to legal process or other encumbrance restricting such transfer;
(C) such transfer would exceed an established credit limit;
(D) an electronic terminal has insufficient cash to complete the transaction; or
(E) as otherwise provided in regulations of the Board;
(2) the financial institution's failure to make an electronic fund transfer due to insufficient funds when the financial institution failed to credit, in accordance with the terms and conditions of an account, a deposit of funds to the consumer's account which would have provided sufficient funds to make the transfer, and
(3) the financial institution's failure to stop payment of a preauthorized transfer from a consumer's account when instructed to do so in accordance with the terms and conditions of the account.
(b) A financial institution shall not be liable under subsection (a)(1) or (2) if the financial institution shows by a preponderance of the evidence that its action or failure to act resulted from--
(1) an act of God or other circumstance beyond its control, that it exercised reasonable care to prevent such an occurrence, and that it exercised such diligence as the circumstances required; or
(2) a technical malfunction which was known to the consumer at the time he attempted to initiate an electronic fund transfer or, in the case of preauthorized transfer, at the time such transfer should have occurred.
(c) In the case of a failure described in subsection (a) which was not intentional and which resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the financial institution shall be liable for actual damages proved.
(d) EXCEPTION FOR DAMAGED NOTICES.--If the notice required to be posted pursuant to section 904(d)(3)(B)(i) by an automated teller machine operator has been posted by such operator in compliance with such section and the notice is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, the operator shall have no liability under this section for failure to comply with section 904(d)(3)(B)(i).
Finally, when you revoke authorization with a pdl, be certain to notify the processor as well as your bank manager. Make sure you notify your bank manager via email so there is documentation. Do not do this through a general customer service email box or a human you can not hold responsible.
§ 910. Liability of financial institutions
(a) Subject to subsections (b) and (c), a financial institution shall be liable to a consumer for all damages proximately caused by--
(1) the financial institution's failure to make an electronic fund transfer, in accordance with the terms and conditions of an account, in the correct amount or in a timely manner when properly instructed to do so by the consumer, except where--
(A) the consumer's account has insufficient funds;
(B) the funds are subject to legal process or other encumbrance restricting such transfer;
(C) such transfer would exceed an established credit limit;
(D) an electronic terminal has insufficient cash to complete the transaction; or
(E) as otherwise provided in regulations of the Board;
(2) the financial institution's failure to make an electronic fund transfer due to insufficient funds when the financial institution failed to credit, in accordance with the terms and conditions of an account, a deposit of funds to the consumer's account which would have provided sufficient funds to make the transfer, and
(3) the financial institution's failure to stop payment of a preauthorized transfer from a consumer's account when instructed to do so in accordance with the terms and conditions of the account.
(b) A financial institution shall not be liable under subsection (a)(1) or (2) if the financial institution shows by a preponderance of the evidence that its action or failure to act resulted from--
(1) an act of God or other circumstance beyond its control, that it exercised reasonable care to prevent such an occurrence, and that it exercised such diligence as the circumstances required; or
(2) a technical malfunction which was known to the consumer at the time he attempted to initiate an electronic fund transfer or, in the case of preauthorized transfer, at the time such transfer should have occurred.
(c) In the case of a failure described in subsection (a) which was not intentional and which resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the financial institution shall be liable for actual damages proved.
(d) EXCEPTION FOR DAMAGED NOTICES.--If the notice required to be posted pursuant to section 904(d)(3)(B)(i) by an automated teller machine operator has been posted by such operator in compliance with such section and the notice is subsequently removed, damaged, or altered by any person other than the operator of the automated teller machine, the operator shall have no liability under this section for failure to comply with section 904(d)(3)(B)(i).
Thank you James. Mu belief in this process is that notifying th
Thank you James. Mu belief in this process is that notifying the processor that the PDL is continuing to debit i just not enough. After I spoke with Intercept EFT, I then sent them a copy of my original C and D letter so they knew that I had revoked that authorization. I then sent a copy of that email back to the PDL so they knew that the processor knew the authorization had been revoked. I guess I was playing both ends against the middle. My own bank was very kind in just closing my account to stop ANY potential fraudulent activity on that account so I was fortunate in that respect. All said and done, I was very fortunate with the speed in which I was able to accomplish all this. Thanks again for all your help. Keep in touch.