You lost money after your bank accounts were hacked. So sorry. That must be devastating. Naturally, you hope your bank will do something about it, ideally refunding the money. Is it in your right to have your bank refund your money, or is it just wishful thinking?
The answer sits in the Electronic Fund Transfer Act. The Act provides important protections to consumers who suffer unauthorized withdrawals from their accounts. It limits the person’s loss to $50 so long as this person promptly notifies their bank that access to their account has been stolen, the law limits the person’s losses to $50.
In an ongoing case, the state of New York has sued Citibank for failing to respond adequately when people promptly told the bank that scammers had initiated wire transfers from the consumers’ accounts online. New York alleges that one person discovered that a scammer had changed her online banking password, transferred money from her savings to her checking account, and then stole $40,000 via wire transfer—all through Citibank’s online banking platform.
Citibank contends that the Electronic Fund Transfer Act doesn’t apply because the scammers ultimately used a wire transfer to take the money, and the Act contains an exemption for transfers made by banks “by means of” a wire service.
That’s incorrect. When a bank connects wire transfer capabilities to its online consumer banking platform and a scammer authorizes a transfer online, the Electronic Fund Transfer Act applies to the transaction except for the bank-to-bank portion of it.