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September 16
S.A.F.E. Act - Auditing for Compliance;
Patricia Cashman

September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
Sonja Kriegsmann and John Burnett

September 23
Bankruptcy 101;
Sam Ott

September 24
Using CPTED to Make Our Banks Safer;
Dana Turner and Carol Dodgen

September 30
Revised Escrow Rules - Review and Update;
Jack Holzknecht and Mary Beth Guard

October 7
CRA - Digging for Credit;
Patricia Cashman

October 8
Applicants and Applications: Knowing the Players and the Rules;
David Dickinson



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#1420427 - 07/27/10 03:05 PM Reg E Dispute/VBV no chargeback rights
Purex Online
100 Club

Registered: 10/04/05
Posts: 179
Loc: South
Hello all its me again with another probing question: I'm not sure I understand what our bank is required to do when a customer disputes an error (POS transaction) and we(the bank) dispute the item and the message is sent back VBV-Visa bank verified. Do banks then still give the money back to the customer and write off what the charge is? Any help would greatly be appreciated. The guy at my bank that is responsible for this task has never been reviewed and is not wanting to explain his procedures. Better me than the regulators HUH!
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Operations Compliance
#1420479 - 07/27/10 03:50 PM Re: Reg E Dispute/VBV no chargeback rights [Re: Purex]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2818
Loc: Illinois
All I can say it, I share your pain. Verified by VISA and its counterpart, MasterCard SecureCode are useful tools to reducing (not eliminating) online fraud.

Basically a cardholder is required provide identifying information such as address/phone number, last for digits of checking account tied to debit card, CVV code, etc. The cardholder can then create a password that they will use at any participating merchant to complete an online purchase.

Unfortunately for the bank, any of this information can be phished, stolen via Trojan computer virus, used by roommate, etc.
Reg E and VISAs zero-liability still apply regardless of the bank's chargeback rights. An alternative to a chargeback in this case is to send a "Retreival Request" to the merchant. This is a non-finanical request that requires the merchant to at least provide you with information about the transaction such as IP Address where the order was placed, name and address where merchandise (if any) was shipped. At least then you will have more information to determine if the cardholder did in fact benefit from the transaction, or if it was truly fraud.

If the merchant fails to comply with the request, this opens up chargeback rights to the bank for "failure to supply requested information." Occaisionally I have recovered funds in this way.

Bottom line is that in the event this is fraudulent purchase, you must reimburse the cardholder and file a report with Visa's Fraud Reporting System (FRS).
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I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1420487 - 07/27/10 03:55 PM Re: Reg E Dispute/VBV no chargeback rights [Re: Purex]
BetsyS Online
Gold Star

Registered: 06/10/09
Posts: 407
We’ve been hit with some VBV fraud. I also belong to a couple of card forums, and most banks are reporting it as well.

Most likely the message means there’s no charge-back rights for your institution under the Visa Operating rules, and no recovery. But you’re still on the hook as far as Reg E is concerned. I assume that your employee has investigated as to whether your customer originated the transaction. Unless you can confirm they originated it, you most likely will need to refund the customer and take the loss.
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#1420571 - 07/27/10 05:07 PM Re: Reg E Dispute/VBV no chargeback rights [Re: BetsyS]
Purex Online
100 Club

Registered: 10/04/05
Posts: 179
Loc: South
crowman3 and BetsyS, you both have been extremely helpful. I got more information out of you two than the individual this responsible for these duties at my bank. OMG, are we going to be in some trouble if I can't get this mess cleaned up. Thanks again
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#1420594 - 07/27/10 05:39 PM Re: Reg E Dispute/VBV no chargeback rights [Re: Purex]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2818
Loc: Illinois
If this individual has never been reviewed, I don't envy the task if you're planning to back-check disputes for violations. Then again, better you find them and correct any mistakes than have the examiners do it for you. Good luck.
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I can do all things through Him who gives me strength. (Phillipians 4:13)

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