Consumer fund transfers are those transfers which concern personal transfers and personal accounts. The first and most obvious distinction between a consumer fund transfer and its opposite, a commercial fund transfer, is that the consumer fund transfer concerns consumers and their funds.
Any law or regulation referring to consumer fund transfers thus only refers to transfers of personal accounts, such as savings accounts, checking accounts, and the like. Primarily, the term is also used in reference to electronic fund transfers, as opposed to simple transfers from or to a consumer account.
Consumer fund transfers are protected under the Electronic Fund Transfer Act, although the Act does exclude certain transactions from being counted. According to the Act, a consumer is effectively defined as any given individual person, and not a person-like entity, such as a company or corporation. A consumer fund transfer, then, would be an electronic fund transfer from a consumer.
An electronic fund transfer would not cover such things as a telephone transfer, for instance, unless that telephone transfer resulted in recurring transfers from an account, each of which might be conducted electronically. Consumer fund transfers would not cover all such preauthorized plans of consistent transfer, however. For instance, a transfer made to the bank holding the account according to a preauthorized plan would not count as a consumer fund transfer because it would not be covered as such under the Electronic Fund Transfer Act.
Consumer fund transfers generally still rely upon the use of a given physical document of some sort, such as a debit card, in order to function. The debit card would include the necessary information to be able to perform consumer fund transfers for that account. For example, paying for a product over the Internet might be considered a consumer fund transfer and might involve the use of a debit card to do so. As a result, consumer fund transfers can be misused by anyone who steals or otherwise wrongfully obtains the debit card or other documentation necessary to perform such transfers.
Consumer fund transfers require authorization from the consumer in order to be valid. Unauthorized consumer fund transfers are those consumer fund transfers which are: consumer fund transfers made by anyone other than the consumer with authority to make the consumer fund transfer for that particular account; consumer fund transfers which do not profit the consumer in any fashion; or consumer fund transfers which involve a party which could not legitimately have gained access to the account in question, for example, through having been given the necessary debit card by the consumer holding the account.
Any of these consumer fund transfers would be considered invalid and would be met with significant damages, and the bank allowing the consumer fund transfer would be held liable. In most cases, the consumer will be able to recover any damages resulting from a consumer fund transfer and may be able to recover further punitive damages from the unauthorized party.