I have a Reg. E question. A customer ordered a Wii game console off of a website that turned out to be fraudulent. Of course, no merchandise was received and the website is now defunct. He pursued a claim with Paypal (paid with the bank debit card which was registered with Paypal), but was told there was nothing they could do because there was no money in the merchant’s Paypal account. There's obviously nothing he can do to dispute the claim with the merchant: the website is gone, the email address is non-existant, etc. Does the customer have a Reg E claim with us and, if so, would we be required to pay the claim?

Not under Regulation E - but you would have to look at any zero liability rules of the card issuer.

Assuming this is a MC/Visa Debit Card and if still within timeframes (120 days) can pursue a chargeback for Non Receipt of Merchandise - a protection afforded by both associations to promote usage of the card. The acquirer takes the loss regardless if there are funds in the merchants account or not.

I didn't realize there was a 120 day time frame for Non-Receipt of Merchandise. We are a MasterCard bank. Where can I find more information on chargeback timeframes. This does not fall under Reg E, does it??

If you are a principal member, MasterCard would have sent you a copy of their Chargeback Guide. (Good bedtime reading if you're having trouble sleeping.)

If you need, you can download a copy in PDF format from their website.

MasterCard Rules

No, this extended period isn't Reg E and you may well be recovering the funds you've paid for the claim. But, non-receipt is not necessarily an unauthorized claim under Reg E.

I kind of have a similar situation. Customer ordered something online received the product. Was charged for the product. Was given 7 days to review and if didn't like return. Customer never returned the product so he was charged. Now they are requesting us to give them credit for it? Does this fall under Reg E?

This is not an unauthorized EFT per Reg E. Why do they want credit if they received the product and didn't return it?

People are unbelievable. Bottom line, did they authorize the debit? Yes. No claim or claim denied, however you want to put it.

Had they returned it, they still wouldn't have a claim until the merchant said the funds would be refunded, and funds didn't show up. The debit would still have been authorized, but the consumer wasn't satisfied with the product. That would be a credit card claim, but not Reg E. It isn't Reg E until a debit/credit happens or doesn't happen, that was supposed to.

I think the problem is that many people feel they have the same right to dispute a transaction over the qualitiy of goods or services when they use a Debit Card that they would have had if they used a Credit Card.

(#1 rule for shopping on the internet - use your Credit Card - not your Debit Card!)