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#1068407 - 10/22/08 02:47 PM Challenge to Negligence as Reg E Dispute Decline
lblu Offline
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lblu
Joined: Sep 2003
Posts: 273
I am well aware that Reg. E does not allow negligence to be used as a reason to decline a dispute. However, my interpretation of this requirement is being challenged using the reason the every other bank is using negligence as a decline reason.

Does anyone out there on BOL have a different interpretation and allow negligence as a decline reason for a Reg. E dispute. I would do a poll but I don't know how.

Thanks.
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#1068446 - 10/22/08 03:23 PM Re: Challenge to Negligence as Reg E Dispute Decline lblu
ktac MITCH Offline
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ktac MITCH
Joined: May 2005
Posts: 1,813
Giant side of TX
I feel your pain - we do what is right & the bank down the street doesn't = They might even require the customer to file a police report (not allowed), or have a policy that says your card was not lost/stolen & you have always had the card in your possession therefore you must have done the transaction (not allowed).
BUT The interpretation that matters is the regulators & here is the direct quote from the Commentary to Reg E (emphasis addeed)
6(b) Limitations on Amount of Liability

1. Application of liability provisions. There are three possible tiers of consumer liability for unauthorized EFTs depending on the situation. A consumer may be liable for (1) up to $50; (2) up to $500; or (3) an unlimited amount depending on when the unauthorized EFT occurs. More than one tier may apply to a given situation because each corresponds to a different (sometimes overlapping) time period or set of conditions.

2. Consumer negligence. 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. (However, refer to comment 2 m 2 regarding termination of the authority of given by the consumer to another person.)
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#1068466 - 10/22/08 03:40 PM Re: Challenge to Negligence as Reg E Dispute Decline ktac MITCH
lblu Offline
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lblu
Joined: Sep 2003
Posts: 273
I've been hearing this "The other bank does it why can't we?" in various ways over the past 20 years. This time, I just want to see how many other banks actually do it? My answer won't change...maybe I'm just looking for a little vindication.
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#1068743 - 10/22/08 07:26 PM Re: Challenge to Negligence as Reg E Dispute Decline lblu
Skittles Online
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Skittles
Joined: Sep 2002
Posts: 13,965
TN
Ask them to back up that statement and give you names of banks that do it that way. I'd almost bet money (which I don't do) that they can't.
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#1068854 - 10/22/08 08:51 PM Re: Challenge to Negligence as Reg E Dispute Decline Skittles
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
In my prior bank we used the negligence out a few times. These times were related to the customers giving the cards to family members and then later being defrauded by those family members (proven through use of ATM and grocery store cameras). The customers admitted having given the card to these persons voluntarily initially. We documented the customers statements very carefully before our investigations and ultimate declinations of their claims.

Unfortunately, as far as I know, that's that only negligence reason that will hold water under Reg E.

We were most successful in simply explaining that we were going to prosecute the person(s) that used the card fraudulently. Sometimes we had to show pictures or copies of delivery tickets to their address first, but many of the claims were dropped once they knew the bank had proof of use by their child or grandchild.
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