“Actual Damages” Under the EFTA Include Emotional Distress

Understanding emotional distress as compensable harm under the EFTA

The Electronic Fund Transfer Act (“EFTA”) authorizes recovery of “actual damages” for any violation of its provisions, including violations of § 1693f’s error-resolution duties. 15 U.S.C. § 1693m(a)(1). The starting point for any proper analysis is the statutory text itself. Congress deliberately employed the broad phrase “actual damages”, without narrowing it to purely economic losses or out-of-pocket harm. Courts do not write in limitations that Congress chose not to include.

Black’s Law Dictionary confirms the breadth of the term: “actual damages” refers to “[a]n amount awarded to a complainant to compensate for a proven injury or loss.” Black’s Law Dictionary 471 (10th ed. 2014). “Injury or loss” naturally encompasses both pecuniary and non-pecuniary harms. Emotional distress is a well-recognized form of personal injury, and where Congress intends to exclude non-economic harm, it says so expressly. Here, Congress did not.

This understanding is consistent with Supreme Court precedent interpreting “actual” or “actual injury” in federal remedial statutes. The Court has repeatedly stated that actual injury is not limited to out-of-pocket loss and includes “personal humiliation, and mental anguish and suffering.” Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974); see also Carey v. Piphus, 435 U.S. 247, 263 (1978) (“Distress is a personal injury familiar to the law…”). Courts interpreting federal consumer-protection statutes similarly recognize that “actual damages” include emotional distress. See Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) (“The term ‘actual damages’ has been interpreted to include recovery for emotional distress and humiliation.”).

I. The Existing EFTA Caselaw Confirms the Textual Reading

Even though EFTA caselaw is comparatively sparse—largely because many EFTA disputes resolve in arbitration—the cases that do exist reinforce the conclusion that emotional distress is recoverable.

In Okocha v. HSBC Bank, USA, N.A., the Southern District of New York held that a plaintiff “may be able to recover compensatory damages for emotional distress under [these] federal claims,” expressly including the EFTA. Okocha v. HSBC Bank, USA, N.A.,700 F.Supp.2d 369, 376 (S.D.N.Y. 2010), aff’d, 488 F. App’x 535 (2d Cir. 2012). The court thus recognized emotional distress as a permissible category of compensatory damages arising from an EFTA violation.

Likewise, Almon v. Conduent Bus. Servs., LLC held that emotional distress allegations sufficiently pled injury under the EFTA, noting that “they have adequately alleged the emotional distress that other courts have found to be sufficient in the context of statutory violations.” Almon v. Conduent Bus. Servs., LLC, Case No. SA-19-CV-01075-XR, 2022 U.S. Dist. LEXIS 55025, at *53–54 (W.D. Tex. Mar. 25, 2022).

Thus, the limited but directly relevant EFTA caselaw aligns with the statutory text: emotional distress qualifies as an actual damage.

II. The EFTA Cannot Be Read in Isolation: The CCPA Statutory Scheme Confirms the Same Result

The EFTA forms part of the Consumer Credit Protection Act (“CCPA”), which houses six federal consumer-protection statutes with private causes of action. Courts have long emphasized that statutes within the CCPA must be interpreted coherently and consistently. As the Ninth Circuit put it:

“We must view the umbrella act, the Consumer Credit Protection Act, as a whole and not as separate unrelated parts. We must also treat the amendments to the statute [such as the EFTA] as if they were adopted as part of the original enactment.” —Bros. v. First Leasing, 724 F.2d 789, 794–95 (9th Cir. 1984).

The Sixth Circuit agrees:

“[W]ith the common purpose of each statute [under the CCPA] to protect consumers with respect to financial credit, courts draw upon case law interpreting one statute for persuasive authority for another statute.” —Clemmer v. Key Bank Nat. Ass’n, 539 F.3d 349, 353 (6th Cir. 2008).

The Third Circuit similarly holds that Congress would not have intended “different intended meanings for identical statutory language contained in similar statutes.” Johnson v. W. Suburban Bank, 225 F.3d 366, 379 (3d Cir. 2000).

This method has been applied repeatedly. See, e.g., Curtis v. Propel Prop. Tax Funding, LLC, 915 F.3d 234, 242 n.7 (4th Cir. 2019); Yuille v. Uphold HQ Inc., 686 F. Supp. 3d 323, 340 (S.D.N.Y. 2023); Smith v. Bank of Hawaii, No. CV 16-00513 JAO-RLP, 2019 WL 404423, at *11 (D. Haw. Jan. 31, 2019).

This cross-pollination matters because every one of the CCPA’s actionable statutes permits recovery of emotional distress as “actual damages”:

• Truth in Lending Act: Kurz v. Chase Manhattan Bank, 273 F. Supp. 2d 474, 480 (S.D.N.Y. 2003) (jury to hear emotional-distress claim under TILA); see also Butler v. Sterling, Inc., No. 98-3223, 2000 U.S. App. LEXIS 6419, at 25 (6th Cir. Mar. 31, 2000) (The Sixth Circuit has found that Section 1640(a)(1) does not preclude awarding consequential damages, "including damages for severe emotional distress[,]" for violations of TILA.); and Gillings v. Nationstar Mortg., LLC, Case No. 1:15-cv-01074, 2016 U.S. Dist. LEXIS 183718, at 14-15 (N.D. Ga. Jan. 25, 2016).
• Fair Credit Reporting Act: Guimond, 45 F.3d at 1333 (emotional-distress damages allowed as “actual damages”). see also Moore v. Equifax Info. Servs. LLC, 333 F. Supp. 2d 1360, 1365 & n.3 (N.D. Ga. 2004); Gohman v. Equifax Info. Servs., LLC, 395 F. Supp. 2d 822, 828 (D. Minn. 2005); Smith v. E-Backgroundchecks. com, Inc., 81 F. Supp. 3d 1342, 1365 (N.D. Ga. 2015).
• Equal Credit Opportunity Act: Anderson v. United Fin. Co., 666 F.2d 1274, 1277 (9th Cir. 1982) (emotional distress available).
• Fair Debt Collection Practices Act: McCollough v. Johnson, Rodenburg & Lauinger, L.L.C., 637 F.3d 939, 947 (9th Cir. 2011) (upholding $250,000 emotional-distress award).

III. Conclusion: Emotional Distress Is Recoverable Under the EFTA

The text, structure, and case law all point in one direction. The EFTA’s reference to “actual damages” includes emotional distress because:

1. The statutory text uses a deliberately broad term without limitation.
2. The Supreme Court and federal courts interpret “actual” injury to include mental anguish and humiliation.
3. The existing EFTA cases themselves recognize emotional distress as recoverable.
4. Every other statute in the CCPA treats emotional distress as a component of “actual damages,” and identical language within the same statutory scheme must be read consistently.