Skip to content
GeoDataVision
Thread Options
#1357333 - 03/13/10 06:09 PM Access device given with pin - exceeds permission
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
We have a customer who provided her debit card and pin to a friend to purchase gas. In her police report she states that she repeatedly asked for the card back from the friend and it was not returned. Upon receipt of her statements she realizes that the card is being used by the friend. The transactions began on 1-11 and she did not notify the bank until 2-20 that the card was being used in excess of her authorization.

In my opinion the customer is liable for all transactions as she provided her debit card and pin to the friend - although the friend exceeded use of the card - the customer failed to notify the bank when she realized she may not get the card back from the friend - which would have stopped further transactions from occuring.

Our security department feels the card was used fraudulenty and therefore, the bank must return all funds to the consumer. I disagree as the card was not obtained through fraud or robbery becauase she gave the card to the friend.

The customer is at fault for not notifying the bank that the friend was using the card in excess and was no longer allowed to use it.

Return to Top
eBanking / Technology
#1357339 - 03/13/10 08:01 PM Re: Access device given with pin - exceeds permission Tryin-2-Comply
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Good question for a case study at a compliance school. The people who get it right will base their answer on the highlighted portion of the following:

(m) Unauthorized electronic fund transfer means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated:

(1) By a person who was furnished the access device to the consumer's account by the consumer,
unless the consumer has notified the financial institution that transfers by that person are no longer authorized;
(2) With fraudulent intent by the consumer or any person acting in concert with the consumer; or
(3) By the financial institution or its employee.


The commentary even provides a scenario almost identical to yours:

2. Authority. If a consumer furnishes an access device and grants authority to make transfers to a person (such as a family member or co-worker) who exceeds the authority given, the consumer is fully liable for the transfers unless the consumer has notified the financial institution that transfers by that person are no longer authorized.

Your customer could have told your bank to suspend the card at any time when the "friend" failed to return it as requested. Your customer did not have to wait until she received her statement.

_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1357343 - 03/14/10 07:18 PM Re: Access device given with pin - exceeds permission Elwood P. Dowd
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
Thank you Ken for responding - I've given this exact information to the security department and they do not agree. I'm going to continue to press forward and stand my ground on this.

thanks again.

Return to Top

Moderator:  Andy_Z