Reg E Claims?Reminder
"Reg E" from the Federal Reserve Board limits liability for unauthorized withdrawal to $50 if the institution is notified within two days of a lost or stolen card.
If the institution is not notified, the liability to the customer is $500 up to 60 days after receiving a bank statement showing fraudulent withdrawals.
After that time, there is no limit on the liability of the customer who did not report the misuse or theft to the institution.
The impact? The customer who calls you and tells you that, "My d... kid has been using my card for a year and is robbing me blind. I just found out about it. You owe me for about twenty withdrawals over the past year!"
Your response? It can be that your institution has no liability at all because the customer did not report the misuse of his card within 60 days of receiving the statement showing the first fraudulent withdrawals.
Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 5, 5/90
First published on 05/01/1990