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#1730223 - 08/13/12 05:32 PM Unauthorized Transactions Issue
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,026
Customer finds unauthorized ATM transactions on their account. Thinks these were done by family member but no idea how they got the PIN.
1. Are we correct in that we have to credit the customer back for the charges less the $50?
2. Are we correct that we cannot require the customer to file a police report or agree to press charges?
3. Does it matter that the customer made some transactions in between the disputed ones? Their card evidently was not permanently stolen but must have been taken and returned.
4. Once we give money back then we have to gather all the information from the ATMs used (not ours)and file the police report and this investigation has to be completed in 90 days?

Management is concerned that there could be many false claims of unauthorized activity as it seems too simple to get your money back from the bank. All you have to do is sign a paper that says you didn't do it and then it's the bank's problem to try to prove otherwise.

Just trying to make sure I have my facts straight in trying to answer management's questions. Can someone please verify or clarify my facts? Thanks.

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eBanking / Technology
#1730264 - 08/13/12 06:07 PM Re: Unauthorized Transactions Issue HR Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
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

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#1730280 - 08/13/12 06:15 PM Re: Unauthorized Transactions Issue John Burnett
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,026
Thanks John.

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