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#2019157 - 06/08/15 10:28 PM Claims unauthorized local POS transactions
CAKE Offline
Junior Member
Joined: Apr 2005
Posts: 25
I have a customer who is claiming she had 37 transactions totaling more than $500 that were unauthorized. The transactions were done from 5/21 to 5/29. She claims her card was lost but didn't realize it until 5/29 when she notified the bank. Most of these transactions were done with a PIN/card present so no charge-back rights and they are all fairly small, with most of them being under $25. I'm having trouble with this because the disputed transactions were all local and they are places where she had previously used the card. Am I going to have to take a loss here, or is there something I'm missing?

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eBanking / Technology
#2019159 - 06/08/15 11:43 PM Re: Claims unauthorized local POS transactions CAKE
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
There are multiple possibilities here.

1. Your customer is lying/forgetful.

2. Your customer gave the card and PIN to someone else who used exceeded your customer's authority to use the card.

3. Your customer had someone looking over their shoulder while the PIN was being used and stole the card and used it without your customer's consent.

You can deny the claim for options 1 & 2, but not for option 3. The problem is how to investigate the claim when there are no chargeback rights. If you have a contact with local enforcement you may want to ask to see if you can get some assistance with obtaining video surveillance. If your customer recently made any ATM withdrawals at your locations, you may want to pull video of those transactions to see if you can identify a "friendly fraud" suspect. You can ask her directly, "Have you given your card & PIN to anyone?"

The Bank may ultimately take the loss, but you are under no obligation to issue a replacement card.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
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#2019634 - 06/10/15 07:56 PM Re: Claims unauthorized local POS transactions CAKE
jms73 Offline
Junior Member
Joined: May 2011
Posts: 47
You may be able to deny for "meets cardholder's pattern of usage"- based on the fact she previously used her card at the locations in dispute.

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#2019901 - 06/11/15 05:19 PM Re: Claims unauthorized local POS transactions CAKE
CAKE Offline
Junior Member
Joined: Apr 2005
Posts: 25
I suspect this customer doesn't want her husband to know that she spent too much. I know there is something about Compelling Evidence but I am unable to locate it in the Visa rules. Does anyone know if facts such as the one mentioned by jms73 will suffice if that is the only fact I use to base my denial on? Her PIN was used in most of these transactions and yet there were no wrong PIN attempts. In talking to the customer, I asked her if she had ever given her card/PIN to anyone and she said no but in talking to the branch employee that helped her fill out the dispute, she told her that she had given her PIN to her kids. I'm trying to build any kind of evidence that I can use to deny this claim but it's tough since she did report her card lost.

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#2019924 - 06/11/15 05:53 PM Re: Claims unauthorized local POS transactions CAKE
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
Compelling Evidence is a representment right that a merchant has to refute a chargeback and is not connected to our ability to accept or deny a Reg E claim.

The interpretations to Reg E 1005.11 provide the description for which you are looking. If you deny the claim for this reason, understand that the Bank is taking a risk of the customer filing a complaint with your regulator, filing a lawsuit, etc. without having any hard evidence to support your decision.

5. No EFT agreement. When there is no agreement between the institution and the third party for the type of EFT involved, the financial institution must review any relevant information within the institution's own records for the particular account to resolve the consumer's claim. The extent of the investigation required may vary depending on the facts and circumstances. However, a financial institution may not limit its investigation solely to the payment instructions where additional information within its own records pertaining to the particular account in question could help to resolve a consumer's claim. Information that may be reviewed as part of an investigation might include:

i. The ACH transaction records for the transfer;

ii. The transaction history of the particular account for a reasonable period of time immediately preceding the allegation of error;

iii. Whether the check number of the transaction in question is notably out-of-sequence;

iv. The location of either the transaction or the payee in question relative to the consumer's place of residence and habitual transaction area;

v. Information relative to the account in question within the control of the institution's third-party service providers if the financial institution reasonably believes that it may have records or other information that could be dispositive; or

vi. Any other information appropriate to resolve the claim.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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