Electronic Funds Transfer Act (EFTA) class actions are now prevalent--consumer class action firms have filed hundreds of class actions under the Telephone Consumer Protection Act.
The EFTA applies to electronic fund transfers (EFTs) from a consumer’s deposit account, such as electronic debits processed over the ACH network and debit card charges processed over the credit card networks. When using recurring EFTs to collect payments from consumers’ bank accounts (e.g., to collect monthly utility or other types of regularly scheduled payments), companies must comply with EFTA by obtaining written authorizations for the EFTs, providing the consumer a copy of the authorization when made, and not conditioning any type of extension of credit on repayment by EFT, among other requirements,
Regulators are challenging the complete absence of a written authorization, a legal defect in the authorization or the compulsory nature of the authorization.An open issue is whether audio recordings of oral authorizations are sufficient. The EFTA provides for actual damages, statutory damages between $100 and $1,000, as well as recovery of attorneys’ fees and costs. For class actions, the total statutory damages recoverable are “the lesser of $500,000 or 1 per centum of the net worth of the defendant.