Business
FINRA Arbitrator Awards Consumer Damages and Fees Against Charles Schwab for Electronic Funds Transfer Act Violations
FINRA arbitrator awarded consumer damages, fees, and costs against Charles Schwab for failing to properly investigate an account error under federal law. SAN
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[{"type":"text","content":"FINRA arbitrator awarded consumer damages, fees, and costs against Charles Schwab for failing to properly investigate an account error under federal law. Federal law requires prompt and meaningful investigations. When those duties are not met, consumers have the right to pursue relief.”— Joshua B. SwigartSAN DIEGO, CA, UNITED STATES, April 7, 2026 /EINPresswire.com/ -- A consumer initiated an arbitration under the Federal Electronic Funds Transfer Act after Charles Schwab failed to conduct a reasonable investigation of a reported error. After a contested evidentiary hearing, a neutral arbitrator awarded the consumer $54,998 as compensation for Charles Schwab’s violation of the Act, and to pay for the consumer’s attorneys’ fees. A Financial Industry Regulatory Authority (FINRA) arbitrator has issued a final, binding award in favor of consumer Mozelle Armijo in an arbitration against Charles Schwab & Co., Inc., finding the firm liable for violations of the federal Electronic Funds Transfer Act (EFTA). FINRA Case No.:: 25-01257 The arbitration, conducted in San Diego, California, addressed claims that Charles Schwab failed to comply with the error resolution requirements mandated by federal law and failed to conduct a good faith investigation into an alleged account error. Following a contested evidentiary hearing, the sole arbitrator determined that Charles Schwab did not meet its obligations under EFTA and awarded Ms. Armijo: $13,998.00 in compensatory damages $1,000.00 in statutory damages $5,000.00 in costs $35,000.00 in attorneys’ fees Interest at 10% per annum until the award is paid in full These sums were awarded pursuant to the Electronic Funds Transfer Act, 15 U.S.C. § 1693m, which requires financial institutions to promptly investigate consumer-reported errors and, where appropriate, provisionally credit disputed amounts. The arbitrator denied an award of treble damages and other relief not specifically requested. The matter was brought by Dr. Armijo through counsel Joshua B. Swigart of Swigart Law Group, APC, and Daniel G. Shay of Shay Legal, APC. The arbitration proceeded under FINRA Rule 12800 to a contested evidentiary hearing and concluded with a final award dated April 2, 2026. Statement from Counsel “In the age of electronic banking, where fraudulent instant transfers are on the rise, this award underscores th...