Regulation E

Regulation E (12 CFR Part 1005) is issued by the Consumer Financial Protection Bureau under the Electronic Fund Transfer Act. Its stated purpose is to protect individual consumers who use electronic fund transfer and remittance transfer services.

Its best-known provision limits your liability for an unauthorised transfer. The rule defines that as a transfer from your account initiated by a person other than you, without actual authority, from which you receive no benefit. Transfers by someone you gave the access device to, transfers made with fraudulent intent by you or someone acting with you, and transfers by the bank or its employee are excluded. If you notify the bank within two business days after learning of the loss or theft of an access device, your liability is capped at the lesser of $50 or the amount transferred before notice. If you do not, the cap rises to a maximum of $500. For an unauthorised transfer that appears on a periodic statement, you must report it within 60 days of the statement being sent to avoid liability for later transfers.

For a person caught in a scam, the key word is authority. On the face of the text, the definition turns on whether the person who initiated the transfer had actual authority, which separates a transfer someone else initiated from one you initiated yourself. The two reporting windows above are short, so tell the bank at once.