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#1167636 - 04/21/09 08:59 PM Unathorized Bill Pay Transaction due to Spyware
DSZ Offline
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Joined: Nov 2005
Posts: 30
Here is the sitution. Customer, not very computer savy by the way, ended up with Spyware on his computer. The spyware logged all his online banking information, passwords, personal information, and security question answers.

Someone accessed his account, from Nigeria, and made a $7,000.00 electronic Bill Payment.

Does this fall under Regulation E?

According to the company that controls our Bill Pay, this does not fall under Reg E because the funds are transferred from the customer's account into an internal account. The funds are then debited in one lump sum, through ACH by the Bill Pay company, from the internal account and credited to the different accounts requested by our customers.

They are stating that this setup makes each individual bill payment an exception to Regulation E, and we do not have to credit back customers for unauthorized transactions in this case.

I am kind of doubtful. The way I see it, it makes us liable for the Unauthorized Funds Transfer because it was processed to our internal account, while we are authorizing the ACH Debit by the Bill Pay Company so there is no dispute involved. That leaves us holding the bag when the customer wants his money back.

We were able to recover the funds for the customer in this case, but with the growth of technology and cyber theft I expect to see it more often and wanted to get everyone's opinion on it.


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eBanking / Technology
#1167775 - 04/22/09 01:01 PM Re: Unathorized Bill Pay Transaction due to Spyware DSZ
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,193
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From the OSC:

Paragraph 3(b)(1) Definition
1. Fund transfers covered. The term electronic fund transfer includes:

vi. A payment made by a bill payer under a bill-payment service available to a consumer via computer or other electronic means, unless the terms of the bill-payment service explicitly state that all payments, or all payments to a particular payee or payees, will be solely by check, draft, or similar paper instrument drawn on the consumer's account, and the payee or payees that will be paid in this manner are identified to the consumer.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#1173595 - 04/30/09 06:56 PM Re: Unathorized Bill Pay Transaction due to Spyware Andy_Z
DSZ Offline
Junior Member
Joined: Nov 2005
Posts: 30
Thank you. This will help me argue with the bill pay company.

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