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11.30.15 by Andrew Shafer


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          Often, agencies negotiate installment payments to compromise claims.  Equally often, the agencies seek to structure the installment payments with ACH transfers from checking or savings accounts.  When a consumer pre-authorizes periodic payments, the Electronic Funds Transfer Act, 15 U.S.C. §1693 (EFTA) applies.  This law is administered through the CFPB.  §1693e of the EFTA requires that any pre-authorizations for ACH transactions be in writing.  A consumer who pre-authorizes ACH payments may rescind the consent (either orally or in writing) any time up to three business days before the scheduled transfer.  If the payments are of unequal amounts, the payee or the bank must provide “reasonable notice” of the amount and scheduled date for the electronic payment.  Since the consumer may cancel the automatic payment any time up to three business days before the scheduled transfer, the notice of a scheduled payment should be given in time to enable the consumer to exercise its cancelation rights.

          The EFTA provides for a civil remedy of actual damages, statutory damages of between $100 and $1000, plus court costs and fees. Class action statutory damages are capped at the lesser of 1% of net worth or $500,000.