1. If the customer files an error claim and you are not able to document to your satisfaction that the customer authorized the transaction, you have to refund the customer. The amount of the refund is calculated under section 1005.6. If you can't document the date on which the customer realized that the card was missing or stolen, you can't impose either the $50 rule or the $500 rule, so you can't hold back the $50.
2. Correct. You can encourage the filing of a report, but can't require it, nor can you require that the customer agree to press charges. You may information the customer that when you identify who used the card, the bank will take any steps it deems appropriate to recover from that person or file charges against that person.
3. No, but it is evidence that the customer may not have known the card was missing.
4. You only have 45 days if the ATM is in a U.S. state. By then you have to complete your investigation and make your determination. If you agree the transaction was not authorized, you must refund the customer and make the required notification. You don't have a time limit on filing your complaint with the police or your suit in court.
5. If you can prove your customer filed a false claim knowingly to defraud the bank, you can decide whether to press for federal charges.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8