A customer reported unathorized transactions on 11/12/11. The items appeared on his October statement. Provisional credit was provided for the items. During the investigation, the same items have been appearing on his statement as far back as July 2010 (this is the farthest we have searched) This is the first time he has notified us that these transactions were unauthorized. What is the customer's liability sicne he has not notified us within 60 days of the item first appearing on his statement?

205.06 (b)(3) Periodic statement; timely notice not given. A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution's transmittal of the statement to avoid liability for subsequent transfers. If the consumer fails to do so, the consumer's liability shall not exceed the amount of the unauthorized transfers that occur after the close of the 60 days and before notice to the institution, and that the institution establishes would not have occurred had the consumer notified the institution within the 60-day period.


In other words, the bank would be on the hook for at most charges on the June 2010 statement and 60 days after the the June 2010 was made available to your customer. The customer would be liable for the full amount of charges after that timeframe.

See if this helps.

http://www.bankersonline.com/tools/compliance/regecalc_liabcalctool.html

Thank you for the reply! Do you have a sugestion as to how far back we should look for the initial activity of the reported transactions?

If you go back to January 2010, make the determination and close out the claim, there's a chance the customer will counter with another claim on transactions in 2009. In that case, you re-analyze the liability based on your new set of facts, and use the 2009 dates to establish when the 60-day period would end, keeping in mind that you've already refunded some money based on the first claim.

You need to keep track of what your customer has done or you'll find yourself paying back money that the customer is liable for.