The Ultimate Guide to the Explanation of Findings Under the Electronic Fund Transfer Act (EFTA)

What Banks Are Required to Tell You—And What to Do If They Don’t

When you dispute an unauthorized transaction on your debit card, the Electronic Fund Transfer Act (EFTA) gives you powerful rights. One of the most overlooked—but most important—of those rights is your right to an “explanation of findings.”

This isn’t optional. If your bank investigates your fraud claim and denies it, they must tell you why. In this guide, we break down what that means, what the law requires, and what you can do if your bank refuses to explain their decision.

What Is the “Explanation of Findings”?

Under 15 U.S.C. § 1693f(d) and Regulation E (12 C.F.R. § 1005.11(d)), when a bank finishes investigating your fraud claim, they must do two things if they determine no error occurred:

1. Deliver written notice of the results of their investigation, and
2. Include an explanation of findings, plus tell you that you can request copies of the documents they relied on.

This provision is designed to protect consumers by giving them a way to understand the bank’s reasoning—and challenge it if it’s wrong.

What Counts as a Valid Explanation?

The law doesn’t define “explanation” with technical precision, but courts and regulators have interpreted it to mean more than a generic denial.

A valid explanation of findings should:

• Describe the evidence or analysis the bank used to make its decision,
• Explain why the transaction was found to be authorized, or why no error occurred,
• Be specific to your case, not a boilerplate statement used in every denial.

Examples of inadequate explanations:

• “We found no error occurred.”
• “Our investigation is complete and your claim is denied.”
• “This transaction matched your history.” (Without further detail.)

Examples of better—but still not always sufficient—explanations:

• “The ATM withdrawal was made using your correct PIN.”
• “You previously used this merchant on multiple occasions, so the transaction appears consistent with your behavior.”

Even if a bank gives a more detailed explanation, you still have the right to request the documents they relied on—such as logs, surveillance footage, or internal notes.

Why the Explanation Matters

Many consumers assume that when a bank denies their dispute, that’s the end of the road. But the explanation provision serves three critical purposes:

1. Transparency – You deserve to know what evidence the bank used and how they interpreted it.
2. Accountability – It discourages banks from conducting sham or superficial investigations.
3. Recourse – A proper explanation helps you identify errors, supplement your claim, or take legal action.

Without this information, you’re fighting blind.

What If the Bank Refuses to Explain?

If your bank denies your claim but doesn’t explain why, or gives only vague or recycled language, they may have violated the EFTA—regardless of whether their denial was otherwise correct.

You have the right to:

• Request the full explanation and supporting documents. This is also required under 15 U.S.C. § 1693f(d).
• File a complaint with the Consumer Financial Protection Bureau (CFPB).
• Take legal action. Courts have held that failure to explain findings is a standalone EFTA violation and can entitle you to statutory damages, actual damages, and attorney’s fees.

What Courts Have Said

Several courts have weighed in on what this “explanation” requirement means:

• Informational Injury: Some courts recognize that failing to provide an explanation causes an “informational injury” by depriving consumers of rights they are legally entitled to.
• Procedural Violation: Even if no money was lost, a bank’s failure to comply with the EFTA’s procedural rules—like explaining findings—can still justify statutory damages.
• Inadequate Explanations: Courts have rejected banks’ arguments that vague or automated denial letters satisfy the EFTA. Specificity matters.

What to Do If This Happened to You

If your bank denied your fraud claim and didn’t explain why—or gave a vague, impersonal response—you might have a legal claim under the EFTA. Here’s what you can do:

1. Gather all denial letters or emails the bank sent you.
2. Look for language that explains their reasoning. If it’s missing or vague, that’s a red flag.
3. Request the documents they relied on. You have a legal right to them.
4. Call our office. At Debit Card Lawyer, we help victims of unauthorized transactions hold banks accountable—and that includes failure to explain findings.

We’ll review your documents for free and tell you if you have a case. If you do, we’ll fight to recover your losses—and send a message that banks must follow the law.

Conclusion

The “explanation of findings” provision isn’t a technicality—it’s one of your most important rights under the EFTA. It ensures that banks don’t get to act like judge and jury without telling you why. And if they ignore this rule, they can and should be held accountable.

Denied without a real explanation?

Call Debit Card Lawyer today. We know the law. We’ve read the cases. And we fight for people like you.