Sixth Circuit addresses Electronic Funds Transfer Act (EFTA) violation

Margaret Wike sued Vertrue Inc., Adaptive Marketing, LLC, and Influent, Inc., after her call to America Online (AOL) to help a friend create an internet-service account turned into a telemarketing fiasco.  Anyone who has ever dealt with AOL will not be surprised to learn that Wilke started out as simply a spokesman for a friend who need help, became the beneficiary of a promised gift of a $50.00 WalMart gift certificate, and ended up with a discount club membership which took $19.95 from her bank account monthly and which she could not cancel for nine months.

Ultimately, Wike filed suit claiming violation of the EFTA and illegal marketing practices by the Defendants.  They persuaded the District Court to dismiss her claims on the basis that she had not complied with the one-year EFTA statute of limitations.  The EFTA was enacted in 1978 to graft a number of consumer procedural protections on electronic funds transfers.  In addition to the protections it provides consumers in the case of mistaken or unauthorized transfers, it also accords consumers a right to sue for damages and to be awarded attorney fees.

Wike relied on the provision which requires continuing withdrawals to be documented in writing with the consumer's written consent.  The Defendants claimed, however, that the one-year time period began to run on the February day when Wike agreed to the initial 30-day trial, and therefore her suit was untimely.  Wike claimed that the time limit did not expire until the date of the first money transfer. 

Ultimately, the court agreed with Wike that the time limit begins to run on the date of the transfer, not on the date of "arrangement."  The judges noted that the consumer has not suffered any harm or injury until a transfer takes place and that if the "arrangement" was interrupted pre-transfer, no EFTA violation could be argued.