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 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 the importance of financial institutions complying with their statutory obligations when consumers report account errors,” said Joshua B. Swigart, counsel for Dr. Armijo. “Federal law requires prompt and meaningful investigations. When those duties are not met, consumers have the right to pursue relief.”

Under FINRA rules, monetary awards must generally be paid within 30 days unless a motion to vacate is filed in court. Failure to comply with an arbitration award may result in regulatory consequences, including suspension of a firm’s registration.

A link to the full order is attached here https://www.finra.org/sites/default/files/aao_documents/25-01257.pdf

About the Electronic Funds Transfer Act
The Electronic Funds Transfer Act (EFTA) establishes consumer protections for electronic banking transactions, including debit card and electronic transfer disputes. The statute requires financial institutions to investigate reported errors within specified timeframes and to provide provisional credit when necessary during the investigation process.

About Swigart Law Group, APC and Shay Legal, APC
Swigart Law Group and Shay Legal are a consumer rights law firms based in San Diego, California, representing individuals in matters involving financial institutions, privacy rights, and consumer protection laws.

Law Firm Information:
Joshua B. Swigart
Swigart Law Group, APC
2221 Camino del Rio South, Suite 308
San Diego, CA 92108
Phone: 866-219-3343
Email: Josh@SwigartLawGroup.com

Joshua swigart
Swigart Law Group, APC
+1 619-838-8546
email us here

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