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#1961345 - 09/11/14 06:56 PM Reg E. $50 customer liability, how to explain that
Tarah Offline
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Joined: Feb 2011
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Fairbanks, Alaska
When explaining section 205.6 for consumer liability, it seems to only reference the lose of theft of a device. What if the fraud happened online? The consumers debit card was in the 'possession' at all times. Would we be able to use the $50 liability if timely notice was given?

Also, does anyone have any suggestions on how to inform a customer of this liability even for an unauthorized transaction? We currently don't use this part of the section because we feel if there is true fraud, the consumer should not be liable for any of it (as long as timely notice was given). We would like to start using this liability but are unsure how to inform the customer because we can't wrap our heads around why they SHOULD be liable for something that was out of their control for an online transaction.

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eBanking / Technology
#1961383 - 09/11/14 08:07 PM Re: Reg E. $50 customer liability, how to explain that Tarah
CULady Online
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The $50 liability does ONLY apply to lost or stolen cards. It does not apply when the card is still in their possession.

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#1961387 - 09/11/14 08:11 PM Re: Reg E. $50 customer liability, how to explain that Tarah
BrianC Online
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BrianC
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Also if your card is VISA/MC branded their Zero Liability protections often supercede Reg E and negate the $50 liability. As a side note when the CFPB took over Reg E from the Fed the numbering for the Reg changed to 1005 so the liability section is now cited.as 1005.6.
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#1961418 - 09/11/14 08:45 PM Re: Reg E. $50 customer liability, how to explain that Tarah
John Burnett Offline
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Cape Cod
Let's also understand that Regulation is about the access device, and in an online transaction, the card number (typically with the expiration date and often the CVV) constitutes the access device. If the information is stolen from the card, I believe that would constitute the loss or theft of an access device.
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#1961422 - 09/11/14 08:52 PM Re: Reg E. $50 customer liability, how to explain that Tarah
CULady Online
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WA
Hmmm... That's an interesting way to look at it John. I was always under the impression that the $50 liability was only in the case of the physical card being lost or stolen.
Last edited by CULady; 09/11/14 08:52 PM. Reason: Typo
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#1961426 - 09/11/14 08:54 PM Re: Reg E. $50 customer liability, how to explain that Tarah
John Burnett Offline
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John Burnett
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Cape Cod
In most cases, it is.
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