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#677021 - 01/31/07 09:26 PM liability on stored value cards
smash Offline
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Joined: May 2004
Posts: 331
Texas
We are a Mastercard merchant for cash advances. If we advance one of these stored value cards for a tax refund (HR Block), who bears the liability if the advance is done for the wrong person? There's no name on the card so no ID comparison is going to do us any good.

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eBanking / Technology
#677077 - 01/31/07 09:52 PM Re: liability on stored value cards smash
Compliancer Offline
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Compliancer
Joined: Jan 2006
Posts: 334
San Francisco, CA
You will find discussion of these cards all over the boards. If it helps to think about it in a different way - your scenario is the same as if you gave a cash advance to someone with a false ID with information that matched the information on the card.

Without the embossed information on the card, the Issuer assumes liability in the case of lost/stolen/fraud. As long as you follow the proper documentation procedures for completing a manual cash advance, you are protected from Chargebacks.

I will comment on this - H&R Block probably analyzed their potential fraud losses for issuing these unnamed cards against the overall cost of issuing them named (includes the cost of the card and the handling and mailing to each client) and determined any such losses were offset by the immediacy with which they could deliver the card to their client.
Last edited by David Grodsky; 01/31/07 10:05 PM.
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