Is Customer Responsible if PIN is on the Card?
by Jim Bedsole and Andy Zavoina, BOL Gurus Guru Bios
Question: If a customer claims unauthorized ATM withdrawals, but admits that the PIN number was with the card, can they be held responsible?
Answer by Jim Bedsole: Their liability is limited by Reg E as long as they notified you of the loss or theft of the card within the specified time limits. Reg E makes no provision to increase the liability because of the customer's negligence, including putting the PIN number on the card. However, that negligence can (and should) affect your decision on whether to reissue another EFT access device to the customer.
Answer by Andy Zavoina:
Jim, as usual, is correct. But I would emphasize that while the above answer says there is no provision to increase liability, in fact it specifically says you cannot increase a persons liability for such an act.
§205.6 "Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer's liability for unauthorized transfers."
So the specific example addresses the question. Review Jim's advice on reissuance and use every opportunity when cards are given out to emphasize "do not write the PIN on the card, or keep it any where near the card."
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