Patrick,

I would not extend this thread any further but for two things. First, your comment in the latest post that the definition section of Regulation E includes "corporation" in the definition of "consumer." It most assuredly does not. The definition of consumer could not be more straightforward: a natural person.
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John, I'm wrong, I should have said the definition of "Person."

From, Regulation E. 205-2 Definitions;

(e) Consumer Means a natural person.

(j) Person Means a natural person or an organization, including a corporation, government agency, estate, trust, partnership, proprietorship, cooperative, or association.

(m) Unauthorized electronic fund transfer means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated:

(1) By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized;

John, It's not my intention to mislead you or waste your time, but from the beginning I was told by the bank manager that their authorization to pay the EFT was covered under Reg E. That's why I did not mention the fact it was a business account. I know a few people with consumer
accounts who have been screwed by this same bank!

EFTs are great until you want to cancel them. This bank won't let you cancel, and if the third party won't cancel, you are screwed, this bank will always pay the third party over their customer. Why? excess FEES that's why.

It seems Regulation E is open to interpretation!

The regulation is quite specific in its coverage:

§ 205.3 Coverage.

(a) General. This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial {{8-31-01 p.7363}}institutions. For purposes of §§ 205.10(b), (d), and (e) and 205.13, this part applies to any person.

If you read the sections of Reg E that apply to any "Person" (which includes corporations, etc.), you will find those sections apply in instances where a "person" will be affecting a consumer's account. This means that an individual, corporation, etc., must follow certain rules when conducting electronic transactions that will affect a consumer's account.

Bottom line is that business accounts are treated differently than consumer accounts when it comes to certain regulations. Unfortunately, if consumer type protections were extended to business accounts in certain types of commerce, than commerce itself might come to a screaching halt.

My understanding of NACHA rules is that if you can catch the electronic debit to your business account before the 1st 24 hours are up, you can have the debit reversed. The bank itself only has a 24 hour window to return business debits as unauthorized.

Your target in this should be the company that perpetrated the fraudulent debits.

§ 205.10 Preauthorized transfers.
(b) Written authorization for preauthorized transfers from consumer's account. Preauthorized electronic fund transfers from a consumer's account may be authorized only by a writing signed or similarly authenticated by the consumer. The person that obtains the authorization shall provide a copy to the consumer.

(d) Notice of transfers varying in amount--
(1) Notice. When a preauthorized electronic fund transfer from the consumer's accounts will vary in amount from the previous transfer under the same authorization or from the preauthorized amount, the designated payee or the financial institution shall send the consumer written notice of the amount and date of the transfer at least 10 days before the scheduled date of transfer.
(2) Range. The designated payee or the institution shall inform the consumer of the right to receive notice of all varying transfers, but may give the consumer the option of receiving notice only when a transfer falls outside a specified range of amounts or only when a transfer differs from the most recent transfer by more than an agreed-upon amount.

(e) Compulsory use--(1) Credit. No financial institution or other person may condition an extension of credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers, except for credit extended under an overdraft credit plan or extended to maintain a specified minimum balance in the consumer's account.

Bonnie,
Thanks for the information, but when I posted this question, Do Banks Have Comply With Reg E? I had no idea it would get so involved.
This bank screwed me, and I'm sure, other people/businesses as well!
I know there are two sides to every story and you have no way of finding out this banks side! Nor do I, This bank won't return phone calls or reply to my letters!

EFTs require a written agreement signed by the consumer.
I did not have any agreement with the bank, their position was that I had an agreement with the third party and that was their authorization to pay any EFTs even after I gave them ample notice to stop payment.

I can't find any regulation that gives banks this authorization to use a third party agreement in such a way that the consumer has no control over their own funds!

So now the issue is not, Did I have protection under Reg E, but did this bank comply with Reg E.?

Patrick,
If your account was a business account then it is not covered by Reg E. You have to look at NACHA rules, the Uniform Commercial Code and state law for your recourse.

If this is a business account, then you are not a consumer with respect to these transactions, and Reg E does not apply.

And, folks, we'll let that be the last word in this exhaustive discussion. This thread will be locked.