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#95810 - 07/10/03 03:27 PM Issuing Debit Cards or ATM
tulip Offline
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tulip
Joined: Feb 2002
Posts: 20
I've seen questions already posted concerning issuing Debit Cards and ATM cards to customers that have overdrafts. I would like some specific answers to a few questions.

1. Does your bank "not offer" debit cards or ATM cards to customer that have numerous overdrafts?

2. Do you ask customers to surrender their cards if you find they are always in the overdraft position even though they pay the overdraft fee?

3. If your branch offices look at number of overdrafts before issuing a debit card or ATM card, how many overdrafts are too many?

4. Do you issue an ATM card instead of a debit card to customers that have numerous overdrafts?

5. What would cause you to request a customer surrender their card?

My branch offices are giving me problems because we ask them to look at the customer's history before allowing them a debit or ATM card. I would very much appreciate any specific answers to my questions I can get. I will be meeting with the branch offices in a few weeks and I need some help.
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Operations Compliance
#95811 - 07/10/03 03:32 PM Re: Issuing Debit Cards or ATM
Andy_Z Online
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
How about one answer. We encourage financial responsibility in our customers, but we do not refuse them services such as an ATM/debit card unless we feel we are losing money in the process.
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#95812 - 07/10/03 03:52 PM Re: Issuing Debit Cards or ATM
MidwestCFE Offline
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MidwestCFE
Joined: Jan 2003
Posts: 524
wish it was the Smoky Mountain...
I agree with Andy...If they commit fraud (empty atm envelopes, etc.), then we freeze the card. Asking for a card back is not worth the effort or humiliation of the customer..
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#95813 - 07/10/03 08:02 PM Re: Issuing Debit Cards or ATM
111 Offline
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111
Joined: Jun 2003
Posts: 484
Everyone gets an ATM/Debit card if they complete the new accounts process, including ChexSystems.

If they show up on our potential overdraft report and an item is returned, we close out their Debit Card at that time. When items are paid against an overdraft, the Debit Card status is not a factor. So, there is a relationship review that is built into the decision process at the overdraft level - based on the fact that ATM/Debit Card activity can produce an overdraft that is not approved (off-line, delayed posting of POS transactions, etc.)

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#95814 - 07/10/03 08:57 PM Re: Issuing Debit Cards or ATM
Alien Offline
Platinum Poster
Joined: Dec 2002
Posts: 862
Mexifornia
We request and manually review a credit report to determine ATM/Debit Card privilege (it’s a privilege not a right!). The credit report is factored into our own empirically derived scoring model and the criteria are:
· ATM score of 900 or lower or no credit history – ATM Card limit $200 (no Check Card provisions)
· ATM score of 700 or below – ATM or Debit Card Limit of $500
. ATM score of 901 and higher - no card at all
This score runs the opposite of the FICO score model in that a higher score means customer may be more vulnerable to misuse privilege. Other factors that go into making a determination includes:
Length of membership
Average balances
Related accounts (e.g., additional/joint accounts)
Recurring electronic deposits
Use of multiple products and services
Negative balance history
NSF activity history
Last edited by Alien; 07/10/03 08:58 PM.
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#95815 - 07/10/03 09:29 PM Re: Issuing Debit Cards or ATM
111 Offline
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111
Joined: Jun 2003
Posts: 484
Alien:
Your scenario was the situation at a prior bank - the card was looked at as potential credit not as another access device. They didn't issue many cards.

It gets down to risk assessment and management with a big factor location. You can save a ton of money by having a lot of cards out as it's one of the least expensive (for the bank) ways a customer can access funds. The risk is low in this environment but may not be low in your environment. Each bank has a different way of looking at this product.

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#95816 - 07/10/03 11:33 PM Re: Issuing Debit Cards or ATM
Alien Offline
Platinum Poster
Joined: Dec 2002
Posts: 862
Mexifornia
Correct T - I guess I should have added that the policy was implemented to correct a previous decision to give cards to everyone. The empty envelops took a big chunk of the bottom line!!! What's good for the goose is definately not good for the gander in this case!!!
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#95817 - 07/11/03 12:33 PM Re: Issuing Debit Cards or ATM
Anonymous
Unregistered

I work in a dispute area of the bank. Whenever we get a customer that claims their card was lost or stolen and there are ATM withdrawals that were PIN based and the customer swear that someone must have shouldered them or the PIN was on the back of the card, if we look at the customer's history, it is always someone with numerous amounts of overdrafts. And the activity was always done at an ATM without a camera. Because of Reg E, we resolve the dispute in their favor and if it happens a second time, we take their card. Because of this and empty envelopes, we look at NSF activity. Our customers that have clean records always seem to have very legitimate disputes. Imagine that???

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