We have a customer that was provided four months of statements where fraudelent transactions have occurred since early January 2010.

The bank provided disclosures at account opening along with each monthly statement about notifying the bank within 60 days after the first statement with activity including fraudelent transactions.

Can't the bank plead that the customer was negligient in not contacting the bank within the 60 days after the first statement and deny any claim?

All transacotin are interrnet based and the fruadters purchases phone cards

I think this will answer your question. This is from the Reg E Official Staff Interpretations -

Paragraph 6(b)(3)—Periodic Statement; Timely Notice Not Given

1. Unlimited liability applies. The standard of unlimited liability applies if unauthorized transfers appear on a periodic statement, and may apply in conjunction with the first two tiers of liability. If a periodic statement shows an unauthorized transfer made with a lost or stolen debit card, the consumer must notify the financial institution within 60 calendar days after the periodic statement was sent; otherwise, the consumer faces unlimited liability for all unauthorized transfers made after the 60-day period. The consumer's liability for unauthorized transfers before the statement is sent, and up to 60 days following, is determined based on the first two tiers of liability: up to $50 if the consumer notifies the financial institution within two business days of learning of the loss or theft of the card and up to $500 if the consumer notifies the institution after two business days of learning of the loss or theft.

Make sure you note that the unlimited liability starts after the 60 days from the first statement. That is what the bank must reimburse the customer.

We have a customer who called in that her house was broken into and her card stolen. There were POS charges but also withdrawals at our ATM with her pin. We checked our security tapes and the man who used the card is driving her car (she drives a purple caviler, not very common). She dropped off a letter at a branch that says the almost $900 in charges are not hers. I have tried repeatedly to call and have left messages. I got her yesterday and she hung up on me when I identified myself. Something is fishy here. We have no charge back rights through Visa. Do we have any protection if we think she was negligent or perhaps scamming us?

do you know if she filed a police report? I would make that a condition of even looking at her claim. Possibly let her know you have video of the person using her card and will turn it over to the police.

I keep telling her in the messages I leave that we need a police report but she won't return my calls.

Reg E Claim Denied on Friendly Fraud?
Answer by Randy Carey and John Burnett, BOL Gurus
Guru Bio

Question: Can a Reg E claim be denied to friendly fraud? A friend takes the card and uses it to withdraw cash from an ATM or makes a purchase. The customer knows who made the transactions, but doesn’t want the bank or police to arrest the individual. Does the bank have the right to deny the claim and if provisional credit was given, reverse it?

Answer by Randy Carey: They either make a claim of unauthorized transactions or they don't. If they are going to make the claim, then you would be required to provide them the relief (refund) as prescribed by Reg E. Once they make the claim, the decision on pursuing the prosecution of the friend is made totally by the bank and the customer has no say in it, as it is now the bank's loss. This is the way that I would portray it to the customer and he or she can make the call. The customer can't have it both ways, get his or her money back and the friend gets off Scot-free.

Answer by John Burnett: If you believe that your customer was somehow connected to the transactions, either he or she received some benefit from the transactions or conspired with the thief then you can deny the claim. If you have evidence that your customer conspired with his or her friend to try to defraud the bank, you can, if you wish, not only deny the claim (and, I trust, close the account), but also contact federal (or state, in many cases) law enforcement concerning an attempt to defraud the bank.

Previous answers on a similar situation by our all knowing Gurus!

madukes - I wanted to make sure you knew that the bank cannot require the customer make a police report prior to refunding the transaction. It can be requested, but not required.

Thank you! (I wasn't sure - I know we do for check fraud cases.)